April 14, 2010 / 3:59 PM / 9 years ago

Brazil beef headed for U.S. if trade deal resolved

* Brazil/U.S. cotton deal may see more Brazil beef imports

* Additional imports unlikely to ease tight supplies

* Imports of Brazil beef may start in 2011

By Jerry Bieszk

CHICAGO, April 14 (Reuters) - Fresh Brazilian beef may be sold in U.S. grocery stores beginning next year for the first time in a decade if the two countries resolve a dispute over cotton, livestock analysts said.

However, analysts said imported Brazilian beef would not be enough to ease the tight supplies of ground beef in the United States, which have kept ground beef prices near a record high.

Much of the beef imported into the United States is lean, and is combined with local supplies, that have a higher fat content, to make ground beef for fast-food outlets.

But such imports have dropped during the past two years as major suppliers like Australia and Canada have reduced production amid the global recession that hurt profitability.

Brazil is the world’s No.1 beef exporter and has the world’s second largest cattle herd but its fresh beef has long been banned by the United States because of foot and mouth disease.

“If the meat starts flowing north it’s going to be later. Time wise, it’s more like 2011 than this year,” said Ron Plain, livestock economist at the University of Missouri.

The average price for ground beef was about $1.78 this week, close to its all time high of $1.92 per lb set in 2008, according to government figures.

“Because we don’t have enough lean ground beef materials here in the domestic market we have been relying on the import market increasingly to make up the difference,” said analyst Altin Kalo of the Steiner Consulting Group based in Manchester, New Hampshire.

“It has become especially so after 2001 or 2002 when you had food service operators like McDonald’s and others that really started to use imported beef in a larger scale,” he said.

U.S. beef and veal imports during January, the latest available data, were down 28 percent from last year to 184.9 million lbs. January imports from Brazil totaled 11.4 million lbs, a 55 percent cut from the 20.7 million lbs last year.

The beef currently imported from Brazil is in cooked and canned form and is used with other processed foods.


“It’s been almost a decade now since we allowed beef from Brazil to come to the U.S. They have had some issues with foot-and-mouth disease and just never seem to be able to control it,” said Kalo.

In an eleventh hour move last week to head off Brazilian penalties on a wide range of U.S. goods, the United States offered concessions on a export loan guarantee program and promised action that could clear the way for beef and pork imports from Brazil, and work to set up measures to prevent the introduction of foot-and-mouth disease in the United States.

Brazil was set to impose tariffs and lift property right protection on $820 million in U.S. goods after the World Trade Organization ruled against U.S. cotton subsidies.[ID:nN06222173]

The United States will also work with Brazil to provide up to $147.3 million in annual funding for technical assistance and other programs to help Brazil’s cotton sector.[ID:nN06221930]


Brazil exports very little pork to the United States.

Plain said he did not expect Brazilian imports to have any impact on domestic livestock or meat prices.

“Governments don’t tend to move very quickly and so I wouldn’t expect impact on current hog prices or current cattle futures. It’s just too far out in the future to really get the futures market excited,” Plain said.

A U.S. cattle group voiced concern about imports of Brazilian beef.

“...We are extremely concerned whenever there is a suggestion that science-based international standards for sanitary and phytosanitary risks in agricultural product trade are not observed or are being bargained on the trade negotiation table,” the Texas Cattle Feeders Association said in a weekly newsletter. (Reporting by Jerry Bieszk, Editing by Bob Burgdorfer)

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