South America Calling

The U.S. and Brazil signed agreements to reopen their ports to each other's fresh and frozen beef in an important symbolic move for the South American producer.

At an event in Brasilia Monday, Brazilian President Michel Temer announced the deal, ending the extended ban on Brazilian shipments following outbreaks of foot-and-mouth disease.

The U.S. Department of Agriculture announced its Food Safety and Inspection Service had recently determined that Brazil's food safety system governing meat products is equivalent to that of the U.S., so fresh (chilled or frozen) beef can be safely imported from Brazil.

Similarly, Brazil recognized the U.S.' negligible risk classification for bovine spongiform encephalopathy (BSE) by the World Organization for Animal Health (OIE).

Brazil is one of 16 countries to eliminate BSE-related restrictions on U.S. beef since last year.

U.S. beef imports have historically been negligible to Brazil, although it does represent another victory in lifting the BSE restrictions.

Brazilian shipments to the U.S. are not expected to jump significantly on the lifting of the ban. Brazil will have to compete for a limited duty-free quota of 65,000 metric tons (mt) and, given current exchange rates, would struggle to compete on the open market given a 25% import tariff.

But access to the U.S. market has an importance beyond American borders for Brazil as a number of other countries base approval for imports on U.S. decisions.

The formal lifting of the ban came a year after U.S. President Barack Obama and then-Brazilian President Dilma Rousseff announced an agreement had been reached.

Brazilian beef exports surged in the first half of 2016, rising 17% on the year to 573,000 metric tons, driven by increased access to the Chinese market combined with the devaluation of the Brazilian real and greater availability on falling domestic demand.

The hope is that the growth in the list of the countries reopening to U.S. beef, accepting the science-based evidence of the safety, will prompt China to do the same.

"Although this move won't be popular among some U.S. producers, it does represent another step forward for trade based on hard science," said DTN Livestock Analyst John Harrington. "Such a rational, non-political standard best serves the expansion of global trade and U.S. beef exporters. By respecting sound science, we can more convincingly demand that other countries do the same. China, are you listening?"

The U.S. Meat Export Federation sent DTN numbers from the Global Trade Atlas showing U.S. beef exports to Brazil totalled 312 metric tons in 2003, valued at about $475,000. This was down from 552 metric tons in 2002, valued at $1.2 million. The peak year for U.S. exports to Brazil appears to be 1998, when the U.S. shipped 6,947 metric tons valued at $17.4 million.

At least one U.S. cattle group, the National Cattlemen's Beef Association, said on Monday it was concerned about reopening the beef trade between the two countries and has yet to see a comprehensive review of Brazil's animal-health risks, Dow Jones news service reported.

"We cannot afford to jeopardize our nation's livestock herds, which are the foundation of our global food supply," NCBA stated, according to Dow Jones.

(CZ)

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