Meat + Poultry - November 2005 - 30

International News & Trends
U.S. jockeys for share of E.U. beef market
According to a report by the U.S. Dept.
of Agriculture Foreign Agricultural
Service's Global Agriculture Information Network, the U.S. beef industry
faces plenty of challenges in the European market. The E.U. has been a
net beef importer since 2003, and U.S.
interests in capitalizing on beef exports
to this large market are growing. Before the opportunities can be fully realized by U.S. exporters must first address several issues. U.S. beef imports
are restricted by the E.U. hormone ban,
and only beef from the Non-Hormone
Treated Cattle program is eligible. U.S.
beef is also facing strong competition
from South American beef exports.
In 2004, the E.U. imported more than
580,000 metric tonnes of beef, about
70 percent from Brazil and about 20
percent from Argentina. Main importers were the United Kingdom, The
Netherlands and Italy, followed by
Germany and Spain.
While Brazil beef exports filled about
70 percent of various beef imports, a
majority of Brazil beef exports to the
EU are at full tariff rates. Recently, Brazilian exports have been stymied by the
discovery of foot-and-mouth disease in
herds there. This came at a time when
the country was seeing record demand
for its beef. In 2004, Brazil beef exports
to the E.U. at full tariff amounted to
about 330,000 metric tonnes. Differences in imports of Brazil beef exist
between member states. Some countries, like The Netherlands and the U.K.,
import a lot of fresh beef, while others,
like Italy and Spain, import mainly frozen beef. The U.K. also imports a large
quantity of beef offal.
Marketing matters in E.U.
U.S. beef is positioned at the high-end
of European consumer markets. Mostly
prime-grade cuts are sold in a number
of high-end restaurants and by direct
mail order. Until recently, it was also
available in the high-end department
stores, but it has been replaced, in many
cases, by Australian, grain-fed beef.
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The perception of U.S. beef in the
European import market is that it must
be positioned as a preferred product
appealing to more affluent consumers.
When it comes to price, U.S. beef can't
compete with other exported products,
from Argentina and Brazil (prior to
F.M.D.). Competition for market share
also in the E.U. also comes from Australian grain-fed beef and beef from
Ireland, which is known for its quality.
According to GAIN, grain-fed beef is
sold mostly in specialty markets while
grass-fed beef is more popular in supermarkets, presumably because of its
leaner qualities.
Currently, U.S. beef imports are
restricted by the E.U. hormone ban.
Only beef from growers adhering to
the N.H.T.C. program can enter the
market. A shortage of animals is being produced under the hormone-free
program for export, due in large part
to the additional expense. Currently,
only three U.S. plants are approved for
export to the E.U.
As part of the N.H.T.C. program:
* All bovine meat exported must originate from animals that have never
been treated with hormonal growth
promoters.
* Each phase of the production, from
birth through slaughter, must receive third-party verification prior
to Food Safety and Inspection Service certification.
* A copy of a signed producer affidavit certifying that the animals have
never been treated with hormonal
growth promoters must accompany
each lot of cattle presented to the
slaughter establishment.
* All cattle must be slaughtered and
processed in a federally inspected establishment approved for production
of products destined for the E.U.
U.S. beef exports to the E.U. are slowly
increasing and more U.S. beef exporters
are taking interest in it. As the E.U. continues to evolve as a net beef importer,
U.S. beef is gaining market share at the
high-end of the market. However, there
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are many hurdles to overcome, most
notably, the E.U. hormone ban, which is
currently being challenged at the World
Trade Organization. Expansion of the
N.H.T.C. program can only offer a limited solution to the problem. U.S. beef also
faces strong competition from mainly
South American beef producers.

Brazil reeling over
F.M.D. outbreak
The discovery of foot-and-mouth
disease this past month in Brazil
is expected to cost the country at
least US$1.7 billion in lost beef
and pork exports,
according to the
country's agricultural officials. At
print time, more
than 50 countries
had imposed bans on Brazilian
beef and pork imports since
F.M.D. was first discovered in
the country Oct. 10. Brazilian
Minister of Agriculture Roberto
Rodrigues, in an address to the
Brazilian Senate Agriculture
Committee on the impact of
F.M.D., said most of the bans
would remain in place for at
least six months, devastating
Brazil's beef and pork industries. With US$2.5billion in beef
exports this past year, Brazil was
the world's top beef exporter in
2004, and the third-largest exporter of pork.
"This year, we will be losing
somewhere around US$500
million," said Rodrigues, after
the announcement that the disease had spread to herds in at
least five southern states. The
minister also announced federal
aid totaling US$15 million to
support the two states suffering
the most, Mato Grosso do Sul,
where the outbreak was first
reported, and Paraná.
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Meat + Poultry - November 2005

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