December 7, 2012 / 9:45 PM / in 5 years

WRAPUP 3-Russia set to halt imports of U.S. beef, pork

* Russia requires testing for ractopamine
    * USMEF says pork, beef exports to Russia could stop
    * USDA asks Russia to suspend requirement
    * Russia move comes after US Senate passes trade bill
    * Cattle, hog futures down

    By Theopolis Waters and K.T. Arasu
    CHICAGO, Dec 7 (Reuters) - U.S. pork and beef exports to
Russia could come to a halt on Saturday following Moscow's
requirement that the meat be tested and certified free of the
feed additive ractopamine, a move analysts said smacked of
political retaliation.
    The move could jeopardize the more than $500 million a year
in exports of U.S. beef and pork to Russia, and comes on the
heels of U.S. Senate approval of a bill to expand bilateral
trade that also sought to punish Russian human rights violators.
    The United States asked Russia, the sixth-largest market for
U.S. beef and pork, to suspend the requirement even as it warned
domestic 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.
    Ractopamine is used as a feed additive to make meat leaner,
but countries such as China have banned its use despite
scientific evidence that it is safe. The United Nations has
agreed on acceptable levels of the drug. 
    The U.S. Meat Export Federation told its members by email
that since the U.S. Department of Agriculture had no testing and
certification program in place for ractopamine, the Russian
requirement could effectively halt U.S. pork and beef exports to
the country by Saturday.
    USMEF, a non-profit trade association, said more than 210
shipping containers of U.S. pork and beef valued at about $20
million were on their way to Russia.
    Canada urged Russia to delay the requirement. 
    "We have asked Russia for a delay in the implementation of
this decision to allow for a thorough and science-based
discussion between Canadian and Russian officials," Canadian
Agriculture Minister Gerry Ritz said in an email statement to
    Jacques Pomerleau, executive director of Canada Pork
International, earlier said the Canadian Food Inspection Agency
has provided meat processors with testing guidelines and is
responsible for signing certificates to make sure the products
meet Russian standards.
    U.S. Department of Agriculture spokesman Matt Herrick
offered to have further technical discussions with Moscow on the
safety of ractopamine.
    "We will continue to reach out to Russia to resolve our
differences, as well as to encourage Russia to implement the
(U.N.) Codex Alimentarius Commission's standards for imported
meat products to help provide greater certainty, in keeping with
their obligation as a World Trade Organization member," USDA
spokesman Matt Herrick said.
    "This is an important opportunity for Russia to demonstrate
that it takes these commitments seriously," he said.
     Russia joined the WTO in August after a 19-year wait.
    The USDA's Food Safety and Inspection Service, in a note
posted on its website on Friday afternoon, said: "Exporters are
cautioned that Russia may reject U.S. pork shipments and delist
producing establishments if ractopamine residues are detected in
exported product."
    FSIS also said at the moment it was not requiring meat
companies for documentation attesting their pork was free of
ractopamine before issuing its export certification.    
    Analysts said the Russian move was linked to the Senate's
passage of the trade bill and noted that prices for hogs and
cattle in the United States were under pressure.
    "This seems to be in retaliation to the Senate's passage of
the trade bill with Russia ... there is certainly no doubt about
it," Rich Nelson, chief strategist at research and brokerage
company Allendale Inc, said.
    He said Russia purchased 1.4 percent of U.S. pork production
and 0.6 percent of beef production, adding that any suspension
of imports from the United States would weigh on cattle and hog
futures at the Chicago Mercantile Exchange.
    Tyson Foods Inc, a leading U.S. meat company, and
agriculture powerhouse Cargill Inc declined to comment
on how a halt in exports would impact them, but both noted the
U.S. and Russian governments were in discussions.
    "We'd rather not speculate on what a halt in exports would
mean to our business, but are hopeful the USDA and Russian
government are able to resolve this issue quickly," Tyson
spokesman Worth Sparkman said.
    Russia's animal and plant health regulator said it would
increase laboratory oversight of pork from three packaging
plants in North America after ractopamine was found in meat
shipped to Russia. 
    CME February hog futures ended 0.975 cent, or 1.2
percent, lower at 83.475 cents per lb. February live cattle
futures fell 0.625 cent, or 0.5 percent, to 130.4 cents
per lb.
    Tyson shares were down 0.3 percent at $19.63 even as the Dow
Jones industrial average rose 0.6 percent.
    In its email, obtained by Reuters, USMEF said: "...This new
requirement effectively means that the Russian market will be
closed to pork and beef exports beginning this Saturday
(December 8)."
    USMEF spokesman Joe Schuele confirmed the email.
    "The deadline is concerning because of an inability to meet
this paperwork requirement," Schuele said.
     Chief U.S. agricultural trade negotiator Isi Siddiqui will
travel to Russia next week to meet with Russian officials to
discuss agricultural trade issues, the U.S. Trade
Representative's office said on Friday.
     White House international economic affairs adviser Michael
Froman could also be part of the delegation that is expected to
press the Russian government to postpone the implementation of
its ractopamine requirement.
    Commerce Department data shows the United States has
exported 213.681 million lbs of pork to Russia so far this year.
In 2011, exports to Russia totaled 190.931 million lbs. 
    Russia imported 121.71 million lbs of U.S. beef and veal
between January and September. Last year, such imports totaled
145.37 million.
    USMEF data showed that U.S. beef exports to Russia in the
first nine months of 2012 were valued at $203.7 million, while
pork exports totaled about $202.9 million for the same period.
    "My first inclination is how much of this is related to
geopolitics and how much of this is the Russians trying to
negotiate political issues through our pocketbooks," said Mike
Zuzolo, president of Global Commodity Analytics.
    "Without a doubt, this issue is weighing on both the hogs
and cattle markets. All year long the lower-level dollar and the
strong export pace have helped underpin our situation whenever
domestic demand has weakened," he said.
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