The USDA-FSIS recently announced that Brazilian fresh beef would soon be allowed back into the U.S. Brazilian beef exports were banned back in 2017 due to recurring concerns about public health issues, sanitary conditions and animal health issues.
In 2017, the USDA’s Food Safety and Inspection Service (FSIS) refused entry to 11% of Brazil’s fresh beef products (approximately 1.9 million pounds), compared to the 1% of rejected shipments from the rest of the world.
U.S. beef industry groups were not happy with the decision. Groups including the National Cattlemen’s Beef Association (NCBA), the U.S. Cattlemen’s Association (USCA) and the Ranchers-Cattlemen Action Legal Fund have released statements expressing their concern over this decision and pledges to monitor the situation closely.
NCBA Senior Director of International Trade and Market Access Kent Bacus cited lingering concerns over meat safety and Brazil’s inspection and audit process. He also expressed concern that an influx of beef from Brazil will exacerbate issues regarding allowing imported beef to carry a “Product of the U.S.A.” label.
“We remain concerned with the beef product Brazil exports to our country and reject the finding that the country’s food safety and production standards are equivalent to the U.S. beef and cattle industry,” USCA President Brooke Miller said in a statement.
Market concerns
Aside from apprehensions about beef safety, what effect will this have on the beef market on a global scale? Glynn Tonsor, a livestock market economist at Kansas State University, says Brazil’s reacquired access to the U.S. market should not have much of a volume or price impact on a domestic scale and that, globally, the USDA’s announcement gives Brazil more flexibility in where it is eligible to ship beef to.
Tonsor says that in the long term, if relative demand from China fell – Brazil exported almost 2.4 million metric tons of beef to China last year, accounting for 46% of its exports in 2019 – or if exchange rates adjusted, making imports into the U.S. more favorable, then additional volumes may move from Brazil to the U.S.
“Moreover, in the long term, the global markets can be expected to further reflect comparative advantages – perhaps in an area less impacted by trade disruptions including livestock disease, human disease and trade disputes,” he says. “If one country such as the U.S. has a comparative advantage in producing high-quality, more expensive items – think grain-finished, muscle cut items – and another has a comparative cost advantage in producing items destined for manufacturing – think product that goes into broader ground beef or processing channels – then additional international trade would be expected to develop where trade becomes an increasingly economically important part of each country’s industry.”
