UPDATE 4-Russia may block some N. American meat over ractopamine

Wed Jan 23, 2013 6:29pm EST

* Russian watchdog says U.S., Canada violated import rules

* Concerns over chilled beef, pork products

* Temporary ban could begin Feb. 4

* Russia imports more than $500 mln/yr of US beef, pork

* USTR's office: "concerned" about Russia's actions

By Melissa Akin and Theopolis Waters

MOSCOW/CHICAGO, Jan 23 (Reuters) - Russia may impose a temporary ban on the import of some U.S. and Canadian beef and pork products as of Feb. 4, amid concerns that they may contain a drug used to make animal muscle more lean.

Russia's Veterinary and Phytosanitary Surveillance Service said on Wednesday that both countries were continuing to send chilled meat products to Russia that violated its import rules that require such proteins be free of residues from the feed additive ractopamine.

Such requirements are also in place in Belarus and Kazakhstan, who are partners with Russia in a three-country customs union.

Russia's potential ban could jeopardize the more than $500 million a year in exports of U.S. beef and pork to Russia. It also comes amid mounting trade tensions between the two countries: The U.S. Senate last year approved a bill to expand bilateral trade - legislation that also sought to punish Russian human rights violators.

The Russian veterinary group "is especially concerned about the import of chilled meat products to Russia," the service said in an English-language statement on its website. Adding to their stated concerns: Such chilled pork and beef product was showing up in the Russian marketplace before the laboratory test results for ractopamine had come back, Rosselkhoznadzor added.

In meat industry circles, the term "chilled" refers to higher-priced protein products that are never frozen.

Ractopamine is used as a feed additive by livestock producers in the United States and Canada and elsewhere. But countries such as China have banned its use amid concerns that traces of the drug could persist, despite scientific evidence stating that it is safe.

The additive's effects on humans may include toxicity and other exposure risks, according to U.S. groups lobbying the Food and Drug Administration for domestic limits on the drug.

The United Nations has agreed on acceptable levels of the drug in livestock production.

USTR "CONCERNED"

A spokeswoman for the U.S. Trade Representative's office said the agency was "concerned" about Russia's actions.

"The U.S. is committed to ensuring that the meat we export to consumers around the world is safe and wholesome. We continue to call on Russia to suspend these unjustified measures and restore market access for U.S. beef and pork products," said USTR's Andrea Mead.

Leading U.S. meat processors Tyson Foods Inc and JBS USA could not be reached for comment.

U.S. agribusiness giant and one of the nation's largest meat processors Cargill Inc "believes in free market access and science-based international trade," said company spokesman Michael Martin.

A ban could strain the U.S. meat industry's ability to find empty storage capacity in the public refrigerated warehousing industry, which enjoyed a business boomlet last year as livestock producers sold off their herds amid the worst drought to hit U.S. cropland in more than half a century.

If meat companies with significant exports to Russia suddenly had that market closed off, the U.S. "may see higher inventories of beef or pork being put in storage, and not as much movement of the product," said Lowell Randel, director of government relations for the Global Cold Chain Alliance.

That, in turn, could drive down U.S. meat prices as inventory supplies grow, say industry experts.

Randel said that the refrigerated warehouse industry in the U.S. currently has about 15 percent available capacity, a normal average for the sector. But, he said, some storage facilities in the Midwest are filling up, especially those whose businesses are dominated by the livestock industry.

"I was talking to one customer the other day, and they were at 104 percent capacity," Randel said. "They were full to the brim."

IMPACT LESS IN CANADA

A ban would likely have limited impact on Canada's livestock industry, as Canada ships no chilled pork to Russia and only a small volume of chilled bovine meats.

In 2011, Canada's fresh or chilled bovine meat shipments to Russia were worth just C$216,000 ($216,300), compared with sales of nearly C$15 million in frozen product, according to data provided by the Canadian Cattlemen's Association.

Canadian Agriculture Minister Gerry Ritz, asked about Russia's position, highlighted the importance of basing international trade rules on science.

"We will continue to work with producers as they strive to maintain access into the important Russian market," he said in an emailed statement to Reuters.

TENSIONS MOUNT OVER RACTOPAMINE USE

Late last year, the United States asked Russia, the sixth-largest market for U.S. beef and pork, to suspend its anti-ractopamine requirement.

Federal officials also warned U.S. meat companies that Moscow might reject their pork shipments that contained ractopamine and stop buying pork from processing plants that produced pork with the drug.

This week, the Russian Veterinary and Phytosanitary Surveillance Service said U.S. and Canadian regulators had failed to respond to requests for information on measures taken to prevent deliveries to Russia of meat containing ractopamine.

Canadian pork shippers have promised to comply with the Russian policy on ractopamine.

The Russian watchdog said imports from Canada were expected to be free of ractopamine by Feb. 28, but it had no such assurances from the United States.

Russia stepped up testing of U.S. and Canadian beef and pork imports in December as traces of ractopamine continued to appear in consignments of meat from those countries after a warning was issued early in 2012.

But the service had said imports continued despite the testing regime.