March 31, 2008

Tough EU restrictions batter Brazilian beef exports

The Brazilian beef industry is being hit hard by the strict restrictions imposed by EU, news and reports by trade publications in Brazil show.

The country is also struggling to secure approval from EU Food and Veterinary Office officials for its farms, confirming major problems with record keeping and traceability.

Loss of access to the European market has already cost the Brazilian beef sector US$300million since the end of January.

Of late, only 87 farms out of a list of 106 have been approved to supply export abattoirs-- a far cry from the 10,000 first thought to be supplying cattle to export abattoirs before the restrictions came into effect.

Authorities say Brazil would need 3,000 large feedlot type farms approved for export to have a realistic commercial export trade. This goal remains a distant prospect, and little progress on increasing the number of farms is expected before June at the earliest.

This situation may likely put Brazil be out of the European market for a considerable time, helping maintain recent gains in beef prices as food service companies were forced to turn to new suppliers. 

Even when Brazil returns, it is implausible to have aggressive price discounts, as it was before as it is facing added costs while recouping millions of dollars due to losses incurred in the international market due to numerous bans from importing countries.