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Brazzil - Economy - January 2004
 

U.S. Mad Cow Gives Brazil a Boost

Despite being the world's largest exporter in terms of volume,
Brazil lags far behind the U.S. when it comes to revenue. 
Cheap corned beef is the bulk of Brazil's meat shipments, and
that is not prone to change until 2005, when experts forecast
Brazil will be entirely free of foot and mouth disease.

Luis Waldmann

 

Brazil, home to the world's largest cattle herd, expects a boost in foreign meat sales as more than 30 countries have closed their markets to U.S. beef on concern it may carry mad cow disease.

"This is a dramatic situation for the United States and it is a shame that this has happened," Roberto Rodrigues, Brazil's minister of agriculture, was quoted as saying. "But this can open up markets for Brazil".

Brazilian meat exports have gone up 74 percent since 2000, and could be slated to replace some of the roughly US$ 3 billion of annual U.S. beef exports. Local producers, who sold nearly US$ 1.5 billion in foreign markets in 2003, are preparing for a rise in orders.

The outbreak of mad cow disease in Europe in 2001 prompted many countries to drop their European suppliers in favor of Brazilian substitutes. As a direct result, Middle Eastern countries raised imports of Brazilian meat threefold to about US$ 210 million in 2003, or 15 percent of the country's total overseas beef sales.

"Brazil is still part of a thinning group of countries that have never had a single case of mad cow disease," said Miguel Cavalcanti of BeefPoint, a local consultancy firm specializing in the meat industry. "Our efforts will be aimed at keeping it that way,"

Japan, which coupled with South Korea has bought about US$ 2 billion of U.S. meat last year, has long barred Brazilian meat on grounds that foot and mouth disease is still present in some of Brazil's sprawling cattle ranges. Unlike the mad cow disease, foot and mouth does not affect human beings, but is highly contagious and can be fatal to cloven-hoofed animals.

Likewise, the U.S. has its own foot and mouth ban which affects Brazilian fresh meat, although lower-priced corned beef has been able to fetch US$ 133 million in sales to that market in 2003. Local producers expect such ban to be lifted in late 2004, shortly before the complete eradication of foot and mouth disease.

Despite being the world's largest exporter in terms of volume, Brazil lags far behind when it comes to revenue. Cheap corned beef is the bulk of Brazil's meat shipments, and that is not prone to change until 2005, when experts forecast Brazil will be entirely free of foot and mouth.

While the United States and Canada dispute where the ill-fated mad cow was bred, the Brazilian government has just pledged to give away US$ 500 thousand in anti foot and mouth vaccines to Paraguay and Bolivia, in an attempt to prevent stray animals from infecting cattle grazing along Brazil's vast borders.

In early 2001, Brazil's delay in submitting mad cow prevention reports to the European Union led Canada to spark a NAFTA-wide cattle block on Brazil. The decision came just one day after Brazil's victory in a hefty Canada-Brazil aircraft subsidies dispute.

"It was probably motivated by political issues concerning Bombardier and Embraer," said Cavalcanti. "It was short-lived though. Soon a delegation comprised of Canadian, American and Mexican experts lifted the ban after thoroughly assessing our cattle."

Mad cow disease, or bovine spongiform encephalopathy, can be lethal to humans and has claimed the lives of more than 120 people, the majority of those in the United Kingdom. Most of the Brazilian herds are grazed on grass, averting contamination by their contact with tainted animal feed, the only known form of mad cow disease transmission.

 
Luis Waldmann is a freelance writer based in Rio de Janeiro and can be reached at editor@bnbureau.com.br


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