U.S. faces competition in global beef export market
By Benjamin Herrold, Iowa Farmer Today
March 18, 2017
The U.S. beef industry has seen some good trends recently, with exports increasing as the American beef supply continues to grow.
“Beef exports rebounded nicely in 2016,” says Joe Schuele, vice president of communications for the U.S. Meat Export Federation. “We were down a bit in 2015 after we had a value record in 2014.”
U.S. beef exports were over $7 billion in 2014.
Scott Brown, ag economist for the University of Missouri, says late 2016 in particular was good for beef exports.
“We ended 2016 with a pretty nice run of beef exports,” he says. “We were up 50 million pounds in both November and December of 2016, relative to a year ago. Some of the export strength was responsible for the price strength.”
Brown is optimistic the good export run will continue in early 2017. But the U.S. faces competition from some key beef-producing countries around the world.
In particular, Australia provides competition for the important Asian markets.
“Those Asian markets are going to be hotly contested this year and next,” Schuele says. “The supplier we go head-to-head with most is Australia, especially in the Asian markets. Australia was very aggressive in those markets when we were absent with BSE. We’ve been gaining back some of that market share.”
Australia flooded the market with beef during a herd liquidation because of drought from 2013-2015.
That led to skyrocketing exports...
HOW BRAZIL’S MEAT SCANDAL COULD IMPACT EXPORTS
The meat industry is one of the cornerstones of the Brazilian economy
By plus55 > Brazil Business
Mar 19, 2017
It took Brazil’s meat industry decades to convince the world that their products were quality. In fact, even Oscar-winning actor Robert de Niro appeared on commercials vouching for Brazil’s processed meat. The country is now the world’s second-largest meat exporter, shipping beef, pork, and poultry to over 150 countries. Every year, exports brought $14.5 billion to Brazil. However, chances are those numbers will go down very soon. Way down.
Brazil’s Federal Police unveiled a scheme that bribed federal auditors in exchange for sanitary permits to rotten beef and poultry containing cardboard fragments. That episode is capable of destroying the image of the entire sector. While JBS and BRF, the industry’s leaders, lost almost $2 billion in one day, other players who are not in the scandal suffered multi-million losses as well.
“In other countries, consumers don’t know the multitude of Brazil’s meat brands. For them, it’s all Brazilian meat,” says Blenda Lara, a lawyer specialized in foreign trade.
She continues: “Things get even bleaker when we analyze that JBS and BRF, which are at the center of the scandal, are present in other sectors of the food industry, like dairy products. Consumers could boycott not only their meat but their entire production.”
Less than one year ago, Brazil had pulled an amazing deal to allow its beef into the U.S. market after 17 years of negotiations. American safety standards for foreign products are among the world’s strictest, and many countries could follow the U.S. in opening their markets to Brazilian beef.
Following the scandal, it would be a surprise if the U.S. didn’t back down from the deal.
Other countries might force prices down or even forbid imports from Brazil altogether, as the European Union has threatened. The bloc’s ambassador to Brazil, João Gomes Cravinho, told O Globo that the EU will suspend imports unless Brazil offers sufficient explanations to the problem. Today, Brazil is the EU’s biggest poultry supplier.
News couldn’t be worse for a country highly dependent on the agribusiness.
Understand Brazil’s meat scandal ...