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Past Present and Future of Brazilian Beef

08 February 2008

BRAZIL - The European Directorate General for Health and Consumer Affairs (DG SANCO)effectively suspends Brazil beef imports from January 31, 2008, as a consequence of the refusal to publish the Brazil list of eligible cattle farms.

The Brazil Ministry of Agriculture, Livestock and Food Supply had put the ball in the EU camp by submitting a list ten times longer than DGSANCO had suggested and announcing a further extension.

The Brazil beef export suspension is expected to last until a new FVO audit, starting February 25, 2008, returns favorable. If unfavorable, this audit will probably trigger a full EU import ban for Brazil beef.

Brazil Ministry of Agriculture, Livestock and Food Supply1 (MAPA) and EU industry sources report that DGSANCO refused to publish the list of eligible Brazilian cattle farms, which have been audited and found in compliance by MAPA, on its TRACES database on January 31, 2008.

As a result, Brazil meat inspection services will effectively no longer sign any beef export certificates as of February 1, 2008. However, product that was certified before this suspension can still enter the EU until March 31, 2008. Negotiations between representatives from MAPA and DGSANCO are expected to take place in the coming week to find a solution to the current situation.

Because the European Commission has doubts about the thoroughness of the Brazil farm audits, it will delay the publication of the Brazil farm list on TRACES until the FVO has performed a follow-up audit. This FVO audit is scheduled to begin on February 25, 2008 and plans to re-audit a sample of ten percent of the MAPA list. This percentage will be a huge task to perform for the FVO team.

Consequences

If the FVO inspection team can finish its audit mission before the end of March and submit a favorable report to Brussels, DGSANCO could publish the Brazil farm list on TRACES and allow Brazil beef exports again before the cut-off date for imports of March 31, 2008.

Beef imports from Brazil would then be interrupted for a few weeks only. If the FVO report is unfavorable for Brazil, the temporary export suspension will likely become a full EU import ban.

This would probably lead to significant EU beef price increases as supply becomes tighter. An import ban on Brazil beef would especially hurt some beef processing industries in a few EU Member States (MS) like Italy and the United Kingdom.

Decreased EU cattle and beef exports, because of further loss of competitiveness, would not be able to compensate the loss of Brazil frozen beef imports for processing.

Imports of higher quality beef could be more easily overcome by increased imports from other sources, mainly from Argentina and Uruguay. This could also offer increased opportunities for U.S. beef exports to the EU.

TheCattleSite News Desk



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