June 21, 2011

EU denies Brazil's beef modification request

The EU has declined to make changes to the requirements of Brazilian beef imports under the 'Hilton' High Quality Beef quota, for which Brazil has a 10,000 tonnes portion, according to the media.

Brazil is currently required to trace cattle from weaning (10 months) to export product under this regime, in contrast to a 90 day traceability requirement for exports out of this quota. In addition, Brazilian 'Hilton' beef exports can only be sourced from grassfed castrated steers or heifers of up to four permanent incisors (36 months), with a minimum carcase weight of 180kg for females and 210kg for males, and fat cover between one to six millimetres.

According to the trade, it is currently difficult in Brazil to source these carcases without supplementary feeding, an option that is currently not allowed under Brazil's specifications. The low protein content of Brazilian pastures makes it difficult to match the EU specifications, in contrast to Argentina's richer pastures which allow for a larger supply of grassfed heavy steers (CNA). In addition, most male cattle in Brazil are not castrated for higher productivity.

As a result, Brazil was only able to use around 8% of is quota allocation in 2009-10, and is expected to export only 400 tonnes (4%) in 2010-11.

Given the low fulfilment rates, the Brazilian government has requested the modification of the carcase specifications for this quota, allowing for a 100 day period of lotfeeding prior to slaughter. However, the EU has rejected the modifications, suggesting Brazil may apply for use of unprocessed feed sources during a certain period of the year, but not for processed protein-rich products such as soymeal, according to the media.

Some Brazilian producer associations have suggested taking the issue to the World Trade Organisation (WTO), with the argument that the EU applies different requirements to Brazil than other countries such as the US and Canada.