BSE Confirmed in Brazil

Brazilian news outlets have reported a case of mad cow disease, more properly known as bovine spongiform encephalitis (BSE). The disease was confirmed in the state of Para, according to a statement by Brazil Minister for Agriculture Carlos Favaro.

According to the ministry's report, the animal was a 9-year-old male in a herd of 160 head. The property has been inspected, with movement into and out of the property halted. Samples from the sick animal have been sent to the World Health Organization for Animal Health lab. This lab, based in Canada, will report on whether this is a classic form of BSE, or some atypical variation. The atypical form is more common in older animals and considered lower risk.

Favaro said in a statement: "All measures are being adopted immediately at each stage of the investigation, and the matter is being treated with total transparency to guarantee Brazilian and global consumers the recognized quality of our meat."

Last year, according to data from Brazil's Ministry of Economy, the country's exports of beef (fresh/chilled/frozen) set a record at 2 million metric tons (mmt), a 17% increase year over year. Chinese demand was responsible for 62% of the volume traded. The value of this totaled $11.8 billion (USD), up 48% year over year.

News of the BSE confirmation led to reports that Brazil's beef exports to China will be halted beginning March 2, 2023. This is a major economic blow to the country, as China is currently the largest export destination for Brazil's beef exports. This is not the first time a case of BSE has halted exports from Brazil to China. In 2021, two confirmed cases halted exports, each lasting around three months.

DTN Contributing Analyst Robin Schmahl noted the BSE case, and said the news led to what he called a "knee-jerk reaction" by the market. He said confirmation would mean more demand for U.S. beef, where supplies are already historically tight. That means a strong potential for higher cash, with boxed beef up on the news $4.31 for choice and $2.79 for select.

"There is no reason feedlots will not hold out for higher cash," stated Schmahl. "The general consensus is that the upcoming Cattle on Feed report will continue to show contraction of the cattle herd providing support."

CONCERNS RAISED EARLIER OVER FOOD SAFETY

Confirmation of BSE in Brazil closely follows reports in January that changes to a federal agency in charge of sanitary standards for Brazilian agricultural products were being publicly criticized by some at the Agriculture Ministry.

News outlet reported that, on Jan. 1, 2023, a ministry memo warned that the decree from President Luiz Inacio Lula da Silva reshuffling staff would undermine food inspection services, as well as work at federal labs in charge of vaccines, veterinary drugs and phytosanitary pesticides.

Victoria Myers can be reached at vicki.myers@dtn.com

Follow her on Twitter @myersPF

(c) Copyright 2023 DTN, LLC. All rights reserved.