Fresh beef exports from the U.S. are back in Brazil! After a 13-year hiatus, the first shipment of U.S. fresh beef has arrived in Brazil, opening promising long-term market opportunities for the U.S. beef industry. In 2016, the United States exported $6.3 billion in beef and beef products globally. With Brazil’s large market reopened to the United States, beef exports are poised for new growth.
The Brazilian market for fresh beef imports from the U.S. was closed in 2003 due to concerns over bovine spongiform encephalopathy (BSE). Since then, the U.S. Department of Agriculture (USDA) has continuously worked with Brazilian authorities to regain market access.
As the U.S. agricultural industry witnesses this first shipment of fresh beef arriving in Brazil, it is the ideal time for U.S. exporters to re-engage in marketing efforts in the country. Currently, the main suppliers of fresh/chilled beef to Brazil are Paraguay, Uruguay, and Argentina – both due to their proximity to Brazil and because they enjoy tax-free access thanks to the Mercosur customs union.
From 2014 to 2016, Brazil imported an average of $296 million in fresh/frozen beef, or 50,000 metric tons, annually. Despite competition from Mercosur countries and a 10% tariff difference for countries outside the customs union, the United States is well-positioned to compete in the Brazilian market thanks to its ability to target high-end consumers.
Brazil still attracts a flow of foreign direct investment even after a corruption scandal involving its meat industry, the country’s finance minister said.
The scandal, which came to light in March, stems from a two-year Brazilian police investigation that revealed how meatpackers bribed inspectors and politicians to overlook practices that include processing rotten meat and shipping exports with traces of salmonella.
With only 21 of the 4,800 meat processing plants involved, Brazilian Finance Minister Henrique Meirelles said he is not concerned about the quality of his country’s beef.
“I’m not worried about that, I think it’s quite safe,” he told CNBC.
“The issue now is for producers to assure everyone that the quality is good and definitely inspections will be made and the quality will be analyzed, which is fair and good for everyone involved in the end,” Meirelles said.