Brazil beef set for US if cotton dispute resolves

Fresh Brazilian beef may be sold in US beginning next year for the first time in a decade if the two countries resolve a dispute over cotton, livestock analysts said.

However, analysts said imported Brazilian beef would not be enough to ease the tight supplies of ground beef in the US, which have kept ground beef prices near a record high.

Much of the beef imported into the US is lean, and is combined with local supplies, that have a higher fat content, to make ground beef for fast-food outlets. But such imports have dropped during the past two years as major suppliers like Australia and Canada have reduced production amid the global recession that hurt profitability.

Brazil is the world's top beef exporter and has the world's second largest cattle herd but its fresh beef has long been banned by the US due to foot and mouth disease (FMD).

According to government data, the average price for ground beef was about US$1.78 this week, close to its all time high of US$1.92 per lb set in 2008.

US beef and veal imports during January, the latest available data, were down 28% from last year to 184.9 million lbs. January imports from Brazil totalled 11.4 million lbs, a 55% cut from the 20.7 million lbs last year.

The beef currently imported from Brazil is in cooked and canned form and is used with other processed foods.

In an eleventh hour move last week to head off Brazilian penalties on a wide range of US goods, the US offered concessions on a export loan guarantee programme and promised action that could clear the way for beef and pork imports from Brazil, and work to set up measures to prevent the introduction of FMD in the US.

Brazil was set to impose tariffs and lift property right protection on US$820 million in US goods after the World Trade Organization ruled against US cotton subsidies. The US will also work with Brazil to provide up to $147.3 million in annual funding for technical assistance.