Brazilian and Namibian beef imports are back in the news. A couple weeks ago USDA’s FSIS announced that they would start allowing Brazil and the sub-Saharan country of Namibia to start shipping fresh beef to the US again.
Both of these countries have had foot-and-mouth issues but have cleaned it up though rigorous vaccination programs, they say.
As you can imagine this news raised the ire of many cattlemen’s groups. Brazil was cleared in 2017 and was to have equivalent food safety standards to the U.S. Then a political storm arrived—“Operation Car Wash”—a huge bribery scandal in Brazil, and some inspection agents were apparently on the take. Brazilian packers had 1.6 million pounds of fresh beef rejected by FSIS customs officers soon after they were cleared.
USDA recently cleared both countries to immediately resume exports to the U.S. Namibia has already delivered 25 metric tonnes to a Philadelphia processor. They have also earned a tariff-free quota of 860 metric tonnes through the African Growth and Opportunity Act.
You can imagine the outcry from cattle groups around the country. This is one of a few issues they all agree on. And they are saying, “We don’t want Brazilian beef in the U.S.” Brazil is the largest beef exporter in the world. Half of all the beef they produce is exported; the other half they consume domestically. The U.S. sends them plenty of beef too.
Here in the U.S. we import a couple billion pounds of lean manufacturing beef, which we mix with our fat to produce ground beef. Over half of the beef consumed in the U.S. is ground beef. So, we use it to add value to our beef.
The main reason our cattle producers don’t want to see beef imported from these countries is because they both have had recent problems with foot-and-mouth disease, and we haven’t had it for almost 100 years. In the last farm bill, cattlemen received funding so USDA could start a foot-and-mouth vaccine bank so we could handle an outbreak if it occurred.
The second reason is the market. Far too many cattlemen still remember that when we started importing beef from Australia and New Zealand in the ’70s, the cattle markets tanked. But now we have a process called tariff-rate quotas to regulate beef trade. When a beef exporting country has a maximum amount of beef, they can send it under favorable tariff rates, or no tariff at all.
The CME Daily Livestock Report said in a recent report, “U.S. beef imports are governed by a quota system, whereby only a specific amount of product from some countries can enter at a low tariff rate. Some countries face no tariff (Canada and Mexico) and this year Central American countries have gained free access as part of CAFTA—Central America Free Trade Agreement.
Currently Brazil has access to a quota allocation of nearly 65,000 metric tons that it shares with a few other countries. This is the equivalent of 159 million pounds on a carcass-weight basis. But Brazil can ship unlimited amounts if they pay the out-of-quota duty of 26.5 percent. They would not be likely to pay the higher tax if China demand holds up.”
Cattlemen’s groups are prepared to fight the Brazilian beef access over issues like food safety, disease, labeling, unfair subsidies. NCBA has frequently questioned the lack of scientific evidence that was used to justify Brazil’s initial access to the U.S. market in 2016, and unfortunately, we were not surprised when Brazil forfeited its beef access, given Brazil’s history of foot-and-mouth disease and its track record of repeated food safety violations at ports of entry.
The U.S. Cattlemen’s Association said it’s “stunned by the recent decision to risk the health of our domestic cattle herd and jeopardize the safety of consumers by allowing the importation of fresh beef from Brazil. We sounded the alarm on Brazil’s appalling practices in 2017, after nearly 1.9 million pounds of Brazilian beef was rejected by USDA’s Food Safety and Inspection Service due to ‘public health concerns, sanitary conditions, and animal health issues.’”
Then R-CALF pointed out that Brazilian beef is being subsidized $1.3 billion. A Nov. 21, 2019, Reuters news article reported that November wholesale beef prices in Brazil were about $1.50 per pound in U.S. dollars. However, the USDA reports that U.S. wholesale beef prices in November were about $2.24 per pound. And we need mandatory country-of-origin labeling to level the field. Stay tuned, this could be a wild one. — PETE CROW
