January 9, 2004

 

 

46,200 Tons Rejected US Beef Stuck In Pacific

 

46,200 tonnes of rejected US beef stuck in the Pacific Ocean will either make the two-week journey back home or be discarded.

 

Some 2,200 container loads of beef, valued at US$300 million (S$508 million), have been in limbo in the Pacific Ocean since the Dec 23 discovery led dozens of nations to ban American beef.

 

Mr David Hegwood, USDA trade counsel, said that Japanese and South Korean officials would not budge on their moratorium on US beef imports, even for beef already en route when the first US case of mad-cow disease was detected last month.

 

'The Japanese and Koreans have been very clear they will not accept any product as of Dec 23,' said Mr Hegwood, who led a trade delegation to Tokyo and Seoul last week. 'There's no equivocation on that.'

 

USDA and Japanese trade officials have held talks, but they were focused on future exports, rather than the beef at sea.

 

As for the beef en route, even meat that does make it back to American shores will face an uncertain future.

 

Some higher-end cuts of beef that are chilled but not frozen may be past their shelf life.

 

Other products - such as cow intestines, tongues and hearts - have no viable market here and would have to be rendered for use in pet food and industrial by-products.

 

The anticipated loss on the shipments is the first of an expected string of financial hits to the US beef industry in the wake of the mad-cow scare.

 

Beef industry officials said that the inability to sell the meat overseas could hurt the biggest and the smallest beef exporters the hardest.

 

The largest processors face tens of millions of dollars in losses because they have the most containers en route.

 

And some smaller operators may not get past this episode. 'It could be the end of their business,' said Ms Lynn Heinze, a spokesman for the US Meat Export Federation, a trade group.

 

Mr Hegwood said the agriculture department was trying to find alternative markets for the beef, but he added that 'there are very few'.

 

There are only enough markets to purchase a few dozen containers at best, he said.

 

Administration officials are also exploring whether the beef could be donated as food aid, but few countries that need such aid would have the freezer capacity to handle the meat.

 

'There really aren't many options for this product,' Mr Hegwood said.

 

The most obvious option is to take the meat back to the United States and try to find a market for at least some of it. Ms Heinze said some containers have already been turned around.