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Market Reports


June 28, 2017

 

Brazilian meat sector suffers another setback as US rejects beef imports

 

 

The US has suspended all fresh and frozen beef imports from Brazil, dealing another blow to the South American country’s beef industry, which has reeled from the widely publicised tainted-meat scandal.

 

The US decision came after the Brazilian government had suspended five processing facilities that were exporting to the US due to food safety and quality concerns.

 

The US market, however, is relatively small as it accounted for only 5% of Brazilian exports in May. Brazil, meanwhile, continues to expand into China, where it remains the market leader.

 

Shipments to the US totalled just below 4,500 tonnes shipping weight (swt) in May, making it Brazil’s eighth-largest beef export destination for the month.

 

Brazilian cattle prices moved lower through the first half of 2017, down 15% since January in Brazilian Real terms and showing the effects of economic instability and the aforementioned industry setbacks.

 

In US dollar terms, however, Brazilian cattle prices have been further compounded as a result of a weaker currency trading close to the historical lows.

 

The Brazilian meat scandal erupted in mid-March when the police announced that 21 Brazilian meat companies—including Brazil’s largest meat producers, BRF and JBS-might have bribed government officials to approve spoiled meat.

 

The scandal led at least 25 countries to temporarily suspend imports of Brazilian meat.

 

Brazil is the world’s largest exporter of beef and poultry, and the fourth-largest exporter of pork.
 
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