Meat + Poultry - January 2006 - 40

South America

setback to Brazil's efforts to gain access for its fresh beef to the lucrative
North American and Asian markets.
Longtime F.M.D. restrictions have keep
this product out of the United States,
Canada, Japan, South Korea and some
other countries. Only cooked Brazilian
beef is allowed into the United States,
which is Brazil's biggest customer in
this category ($126 million worth in
the first nine months of 2005).
Ironically, Brazil in mid-September
had been waiting for U.S.D.A. to give it
F.M.D.-free status, which it believed was
overdue. U.S.D.A.'s Animal and Plant
Health Inspection Service completed a
risk assessment of F.M.D. in Brazil in
late 2004. It had reportedly written a
proposed rule to allow fresh Brazilian
beef into the United States, and the feeling was that it might be published before year-end. But the new F.M.D. cases
are likely to set this process back at least
a year, say observers.
Brazil will attempt to persuade
U.S.D.A. the disease is fully contained
and fresh beef from F.M.D.-free zones
is absolutely safe. If and when U.S.D.A.
does approve the importation of fresh
Brazilian beef, Brazil will likely not
receive its own tariff-free quota. But
it will be able to use part of a 64,000
metric ton "other quota" amount used
by several Central American countries.
It will also be able to ship as much
beef out of quota as it wants, unless the
industry and others contrive a way to
limit total imports.
Uruguay goes natural
The numbers could be big, if one
looks at what Uruguay has done in
the past two years. It exported a record 360,000 metric tons worldwide
in 2004, making this small country
the seventh-largest beef exporter. The
United States is by far its largest export market, says Carlos Gianelli,
Uruguay's ambassador to the United
States. It sent 265,000 metric tones of
beef worth $370 million to the United
States in 2004. Uruguay has only a
20,000-metric-ton, tariff-free quota

MEAT&POULTRY

January 2006

for the United States, so it exported
88 percent out of quota. From Jan. 1
to early November 2005, it had had
exported 151,000 metric tons to the
United States out of quota.
Uruguay has 16 beef slaughter plants
licensed to export to the United States,
while 14 plants are licensed to export
to the European Union. The meat in-

will have 61 million by 2009, he says.
Argentina's top export markets are
the European Union and Russia. They
took 36 percent of all its exports in
2004 and had taken 53 percent in the
first eight months of 2005. But Argentina clearly has its sights set on
regaining access to the U.S. market
after being shut out in early 2001 due

"Brazil's numbers are
breathtaking already
and it is still growing."
dustry is vital to Uruguay's economy,
says Gianelli. It represents 6 percent of
GDP and 25 percent of the country's
exports. Uruguay has 12.2 million
cattle, and 70 percent of the beef it
produces is exported. In light of this,
Uruguay continues with a mandatory
F.M.D. vaccination program, he says.
Uruguayan beef farmers enjoy an advantage as an exporter because they do
not feed antibiotics or growth promotants to their cattle (They were banned
in 1962.). This makes Uruguay a useful source of "natural" and organic beef
for U.S. grocery chains such as Whole
Foods Market and Wild Oats. Uruguay
also is in the final stages of implementing a mandatory cattle identification
program using radio frequency identification tags.
Uruguay's beef industry though, is
dwarfed not only by Brazil but its other huge neighbor, Argentina. It is the
world's fifth-largest beef producer and
No. 3 exporter. In 2004, it produced 3
million metric tons of beef and exported
625,000 metric tons. It expects to export
at least 700,000 metric tons this year
worth more than $1.1 billion. Exports
for 2006 are projected at 720,000 metric
tons and look to increase in the coming
years. Production in 2009 is projected to
be 3.8 million metric tons, says Arturo
Llavallol, president of the Argentine
Beef Promotion Institute. Argentina
currently has 54.5 million cattle and

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to an F.M.D. case. The World Organization for Animal Health (the OIE)
declared Argentina F.M.D.-free in
January 2005 and Argentina believes
the U.S. market will reopen to its
fresh beef in the first six months of
2006, says Llavallol.
As part of a move to produce more
beef per animal, the Argentine government from Nov. 1 required that cattle
weighing less than 300 kilograms (661
lbs.) could no longer be slaughtered.
The intent of this measure is to increase
beef production by focusing on the 2
million calves slaughtered annually
with an average weight of 240 kg (529
lbs). The government hopes the measure will mean a larger beef supply and
lower domestic beef prices. The measure was said to be in effect for only
180 days. But industry officials say it
will likely become permanent.
U.S. invests in
South American beef
Not surprisingly, North American interests are investing in South America.
And consolidation is occurring among
beef processors in the region. A group
of North American beef industry players is quietly building a presence in the
industry. Atlanta, Ga.-based Global
Protein Group, LLC announced this
past August the formation of a joint
venture with agribusiness cooperative
Corol Agroindustrial to build a beef

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Meat + Poultry - January 2006

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