February 10, 2011

Taiwan finds forbidden ractopamine on US beef exports

US beef exporters are eagerly seeking basic information from Taiwan on how it will handle beef imports from the US in the wake of a finding that certain beef contained traces of an allowed feed additive in the US but banned in Taiwan.

The feed additive, known as ractopamine, is used by many US cattle producers to encourage muscle meat growth. Its presence in US beef was detected last month after Taiwan ramped up testing for ractopamine at the start of the year, including on products that had already entered the market in Taiwan, sources said.

One US source said the government of Taiwan delegated testing authority starting this year to local officials, which has created some inconsistencies across different regions of the country. The US government was upset at the way Taiwanese authorities publicly removed US products from shelves in Taiwan following the findings, one source said.

The end result for US exporters is that purchasers in Taiwan are now wary of sourcing beef from the US, which is hampering US export sales, sources said.

Industry sources said they still do not know answers to basic questions, such as what will happen to any beef shipments that could be found to contain traces of ractopamine in the future. It is unclear whether the actual cuts would be rejected, or the container, the pallet, or the entire shipment that contains the product with the residue, they said.

While Taiwan has long maintained a "zero tolerance" policy for ractopamine, at least some US producers have continued to ship product to Taiwan from cattle that were fed this additive. The question that now has emerged is how to continue to access this market taking into account Taiwan's new emphasis on testing, one industry source said.

This source said it would not be economically feasible to put in place a strict regime that would ensure that beef shipped to Taiwan does not contain any traces of ractopamine. Doing so would require strict segregation and tracking measures, which would drive up the cost of beef for the Taiwan market, he said.

The US has a similar programme in place for beef shipments to the European Union, which ensures that beef shipped there does not come from cattle that were raised with artificial growth hormones. That said, US beef shipped to the EU serves a high-end niche in the market and fetches a high price, this source said.

By contrast, much US beef destined for Taiwan is sold to middle-income consumers who pay less for it. The US and Taiwan will therefore have to find a way to meet each others' requirements without jeopardising the market for US exporters, who are the leading supplier of beef to Taiwan, this source said.

US exporters have long been eager to secure a maximum residue limit (MRL) for ractopamine in Taiwan, rather than a strict "zero tolerance" policy, but doing so is controversial in Taiwan, one source said. This source said that before this year, Taiwan had largely held off on testing US shipments.