U.S. beef exports to Brazil resume | TheFencePost.com

U.S. beef exports to Brazil resume

Traci Eatherton
for Tri-State Livestock News

Brazil U.S. Beef - Agricultural Attache Nicolas Rubio, Agricultural Trade Office Director Chanda Berk and Consul General Ricardo Zuniga onsite in Brazil for the first arrival of U.S. fresh beef — USDA choice boneless top beef sirloin (or picanha).

Following a 13-year hiatus, U.S. fresh beef exports are back in Brazil, bringing new market opportunities to the U.S. beef industry. In 2016, the U.S. exported $6.3 billion in beef and beef products globally.

"With Brazil's large market reopened to the U.S., U.S. beef exports are poised for new growth. I look forward to Brazilians getting the opportunity to eat delicious American beef, because once they taste it, they'll want more of it," U.S. Ag Secretary Sonny Perdue said.

U.S. beef has not been accepted by Brazil since the December 2003 bovine spongiform encephalopathy (BSE) case. Last August, the two countries announced that they would resume trade for fresh and frozen beef cuts, based on the U.S.'s classification by the World Organization for Animal Health (OIE) as a negligible risk country for BSE. Brazil has shipped small volumes of frozen beef to the U.S., but exports to Brazil remained closed because of regulatory obstacles, including a label registration requirement and the need for U.S. slaughter plants to be relisted in Brazil.

"In 2003, markets for U.S. beef slammed shut around the globe after the first and only cow with classic bovine spongiform encephalopathy within our borders was discovered. USDA recruited a team of experts in different fields within the agency to reopen them," blogged William James, retired chief veterinarian with USDA's Food Safety & Inspection Service.

Referred to as the BSE wars, James said a number of agencies worked together to keep valuable markets open. The USDA's Foreign Agricultural Service and Animal and Plant Health Inspection Service have continued this work. Additionally, USDA's FSIS has provided documentation and information on the U.S. food safety requirements and standards for beef.

This is an ideal time for U.S. exporters to re-engage in marketing efforts in the country, according to USDA. Currently, Brazil's main suppliers of fresh/chilled beef are Paraguay, Uruguay and Argentina — because of their proximity to Brazil and because they enjoy duty-free access as a result of the Mercosur customs union. From 2014-2016, Brazil imported an average of $296 million of fresh/frozen beef, or 50,000 metric tons, annually. Despite the competition from Mercosur countries and a 10 percent tariff differential for countries outside the customs union, the U.S. is in a great position to compete in the Brazilian market thanks to the ability to target high-end consumers.

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CAMPAIGN LAUNCHED

The FAS Agricultural Trade Office in Sao Paulo recently launched the #USFoodExperience — a market promotion campaign to support the branding and promotion of U.S. food and beverage products in Brazil, including U.S. beef. Brazil boasts a population of more than 206 million people, with more than 40 percent of the population in the middle class and 16 million high-end consumers. Despite the country's current economic crisis, it is a promising market for U.S. high-value products, like fresh beef. Brazilians are familiar with the quality and diversity of U.S. food products and there is a demand for high-quality cuts of beef in both the foodservice and high-end retail sectors.

According to the U.S. Meat Export Federation, exports of both beef and pork showed excellent March results.

Beef exports totaled 105,310 metric tons in March, up 18 percent year-over-year, with value increasing 22 percent to $588.2 million. First-quarter beef exports were up 15 percent in volume (292,215 metric tons) and 19 percent in value ($1.61 billion).

March exports accounted for 12.5 percent of total beef production and just under 10 percent for muscle cuts only, each up slightly from last year. For the first quarter, the percentage of total beef production exported was down slightly from a year ago (12.4 percent vs. 12.5 percent) despite an increase for muscle cuts (9.8 percent vs. 9.4 percent). Export value per head of fed slaughter averaged $270.14 in March, up 11 percent from a year ago, while the first-quarter average increased 10 percent to $267.71 per head.

Pork exports reached 227,955 metric tons in March, up 16 percent year-over-year and topping the previous monthly high set in November 2016. Export value was $586.6 million, up 22 percent. For the first quarter, pork exports were up 17 percent in volume (627,647 metric tons) and 22 percent in value ($1.58 billion).

"Entering 2017, with record-large pork production and an uptick in beef slaughter, we knew this 'wall of U.S. meat' presented a challenge for our industry," said USMEF President and CEO Philip Seng. "So the fact that first-quarter export volumes are higher than a year ago is not surprising, but it's important to look beyond that — to the higher percentage of production being exported and the strong return on those exports. The U.S. is not just moving more meat internationally because we have more available. Our products are commanding solid prices and winning back market share in many key destinations, even with a strong U.S. dollar and many trade barriers still in place. But our competitors are working every day to reverse this trend, so we must aggressively expand and defend our international customer base."

BRAZIL BEEF SCANDAL

While U.S. exports to Brazil have begun, Brazil's "Operation Weak Flesh" is still taking its toll on the countries own beef market.

According to reports, 57 meat importers imposed restrictions on Brazilian beef following the March scandal that included bribery of health officials, a lapse in inspections and tainted meat. But the inspection of 100 percent of shipped beef now proves it is safe, according to Agriculture Minister Blairo Maggi.

The markets currently open to Brazilian meat exports are worth a combined $13.55 billion, representing 95.3 percent of the country's total export market, according to an Agricultural Ministry statement.

The "Weak Flesh" investigation triggered 328 official information requests from other countries regarding the investigation. Brazil's exports of beef, pork and poultry fell 22.1 percent last month, though a sharp rise in prices partially offset the drop in volumes, the Agricultural Ministry said. April's meat exports were down 9.8 percent at $1.08 billion from the same month a year ago.

Meat processor's JBS and BRF, in the midst of the scandal, have both reported revenues are down, following the federal investigation.

JBS' first quarter earnings decreased 31 percent or 687.9 million, according to the company. And Brazilian food processor BRF SA reported a net loss of 91 million in the first quarter as net operating revenue fell on a combination of lower prices and production volumes, according to a company statement.

-Eatherton is a freelance writer from Beaulah, Wyo. When she's not writing, she's riding her horse or playing with her grandson. She can be reached at teatherton@msn.com.

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