Brazil pork exports to US unlikely to increase from cotton deal

A finalised version of a proposed rule by April 16 designating the Brazilian state of Santa Catarina as free of several diseases that affect hogs and cattle, might do little to boost Brazilian meat exports to the US.

The pledge was made as part of a preliminary deal reached with Brazil in a separate dispute over US cotton subsidies and loan guarantee programmes, which were faulted by the World Trade Organization (OIE) in a legal challenge mounted by Brazil.

In particular, the US agreed to publish a rule recognising Santa Catarina as free of foot-and-mouth disease (FMD), rinderpest, classical swine fever, African swine fever, and swine vesicular disease.

The US has for years been in the process of issuing such a rule, and while it is not related at all to the cotton dispute, its inclusion in the deal guarantees that the US will finally move ahead, sources said.

The rule is primarily relevant for Brazilian pork producers, as Santa Catarina is primarily a pork-producing state that, like the rest of Brazil, has for years been unable to ship pork to the US because of the presence of FMD.

Santa Catarina is responsible for about 25% of overall domestic production in Brazil, and has already been cleared by the OIE as being free of FMD without vaccination.

However, according to Pedro de Camargo Neto, president of the Brazilian Association of Producers and Exporters of Pork, the proposed rule for Santa Catarina will have little impact on the amount of pork that Brazil ships to the US because the US industry is competitive and shipping costs put Brazilian producers at a relative disadvantage in the US market, although producers in both countries compete in third-country markets.

Currently, the US imports about 84% of imported pork volume and about 70% of imported pork value from Canada. After that, Denmark has 10% of the volume and 15% of the imported pork value, and all other countries capture only small percentages of the US market, according to an industry source.