5 February 2011

5 minute read

In 2009, US livestock and poultry exports were valued at more than $10 billion, accounting for about 12 per cent of total global meat trade, which has been estimated at nearly $87 billion in 2009 according to a report from the USDA Foreign Agricultural Service.

However the USDA says that there are growing concerns about antimicrobial resistance that have caused some US trading partners and competitors to implement restrictions and prohibitions on the use of certain antimicrobials for subtherapeutic or nontherapeutic purposes in animal production.

Although antibiotic use in animals has not been a significant factor affecting US trade in meat products to date, the USDA report says that evidence suggests that country restrictions on the use of these drugs could become an issue in the future and could affect US export markets for livestock and poultry products.

At issue is whether increased restrictions and prohibitions on the use of certain drugs in animal feed in some countries, including the European Union (EU), New Zealand, and South Korea, could affect or may already be affecting international trade in livestock and poultry products from countries, such as the United States, that do not actively restrict the use of these drugs for growth promotion in animal production.

In the United States, legislation has been introduced that seeks to restrict the use of certain antimicrobial drugs for subtherapeutic or nontherapeutic purposes in food-producing animals.

In the 111th Congress, the leading bill was the Preservation of Antibiotics for Medical Treatment Act of 2009 (H.R. 1549; S. 619).

Most US livestock and poultry producers are opposed to such restrictions because of concerns about animal welfare and food safety, as well as concerns about possible increases in production costs, among other reasons.

Presently, it is not possible to precisely predict or to provide a quantitative assessment of the potential trade implications of future restrictions on antimicrobial use in food animal production.

The report says that given the number of market variables that would need to be evaluated, along with other trade issues facing US meat exporters in global markets, it is difficult to precisely predict trade implications of possible future restrictions on antimicrobials in animal feed in selected countries.

However, it is possible to examine the range of possible outcomes from two scenarios involving the USDA says that potential trade implications for US livestock and poultry exports from tightened restrictions or prohibitions on the use of antimicrobial drugs in animal feed for growth promotion:

• Scenario 1: Tightened restrictions or prohibitions in key US export markets, without corresponding changes in the United States on the use of antimicrobials in animal feed for growth promotion.
• Scenario 2: Tightened restrictions or prohibitions in key US export markets, with corresponding prohibitions in the United States on the use of antimicrobials in animal feed for growth promotion.

The report discusses the possible outcomes under these scenarios in terms of changes in US livestock and poultry exports and changes in US market share in global meat markets.

The report says that under the first scenario, at present, two of the United States’ key meat competitors — the EU and New Zealand — have imposed restrictions on their own domestic industries regarding the use of antimicrobials in feed for growth promotion, which also affects countries wishing to export into these markets.

Although other US major export competitors, such as Brazil, Argentina, Uruguay, and Australia, currently do not have similar restrictions in place, these countries generally grow animals that are rangeland-fed or grass-fed. These animals may be less exposed to antimicrobials, compared to other countries where the majority of animals raised may be regularly exposed through in-feed additives at feedlot operations, The USDA says.

Under such a scenario, this might suggest that some US export competitors, such as the EU and other major net-exporting countries, may be better poised to capture a larger share of world meat export markets.

Under the second scenario, the report says it is unclear whether such a scenario would result in opportunities for US meat exports in global markets, or whether US restrictions would adversely affect overall meat production in the United States.

Some might speculate that should the United States restrict or prohibit the use of antimicrobials in animal feed for growth promotion, US meat exports might increase, given general expectations that consumer demand for antibiotic-free meats is growing.

The USDA explains that livestock and poultry growers in the United States and elsewhere use low levels of these drugs in animal diets and feed: this practice helps improve animal growth rates and feed efficiency, and also helps reduce mortality and morbidity and improve reproductive performance.

Improved growth rates and feed efficiency translate into important cost savings for most growers, which in turn positively influences producer incomes and per-animal net returns.

Prohibiting the use of these drugs for growth promotion purposes use would likely carry cost implications for growers, raising overall production costs possibly beyond what growers may be willing to accept and still remain in business.

This could potentially lower US meat production and reduce supplies available for export, says the report.

Alternatively, US prices might increase relative to those of competitors and remove any price advantage US meat exporters might have currently, which could also erode US export market share.

Under a scenario whereby the United States produces and exports antibiotic-free meat, overall traded product volumes would likely be very low compared to current volumes without such restrictions.

Further Reading

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You can view the full report by clicking here.