Brazil Takes On New Role as World Power in Meat and Livestock Trade
Mar 31, 2017
Over the last several decades, Brazil has emerged as one of the strongest economies in Latin America, its per capita GDP more than tripled between 1960 and 2015, according to World Bank data. This growth has come about in large part due to their strength as an exporter. Back in January 2016, I wrote about how Brazil had become an agricultural powerhouse, with the turning point marked by the establishment of a national agricultural research system, EMBRAPA, in the 1970’s. However, their current status as the top meat exporting nation is of more recent vintage--the value of their beef, pork, and poultry exports exploded from an average of just over $1 billion annually in the early 1990’s to more than $12.5 billion annually over the most recent five-year period of data available from the UN’s Food and Agriculture Organization (FAO).
Many of needed precursors for a successful livestock sector had long been present in Brazil--ample grasslands for grazing cattle, and access to grains and oilseed to produce animal feed. The government ended its differential export tax on soybeans in the mid-1990’s, but not before it served its purpose, which was to encourage construction of soybean crushing facilities in-country by favoring the export of soybean meal and oil rather than whole soybeans. When that preference was removed, it had the effect of incentivizing more domestic feeding of livestock.
Large-scale broiler and hog production and marketing practices, including contract growing of animals and vertical integration of feed, production, and slaughter, emerged in Brazil in the 1970’s, not long after the practices started in the United States.
Over the past few decades, the government of Brazil has invested heavily in both funding and political capital to help their livestock producers overcome sanitary and phyto-sanitary problems that their products faced in international markets. Until those concerns could be addressed, Brazil was largely limited to exporting processed meat and livestock products into many markets, rather than chilled or frozen product.
In particular, an outbreak of Exotic Newcastle’s Disease (END) in the country’s poultry sector in 2006 slowed down acceptance of Brazilian fresh broiler exports in both the United States and Canada. In response, the government initiated a National Program for Poultry Health to seek to control END around the country, including vigorous study of how the disease was transmitted from wild birds such as pigeons to commercial poultry flocks. Based on the vaccination effort undertaken through this program, Brazil was able to self-identify as END-free by 2010. The country is now the world’s largest exporter of broiler meat, valued at more than $7 billion in 2013.
Brazil’s pork and beef trade has also been constrained by the endemic status of foot and mouth disease (FMD) in the country. For these livestock types, Brazil has tackled eradicating the disease through a province by province vaccination program. In 2014, after an extensive risk analysis conducted by professionals at USDA’s Animal and Plant Health Inspection Service (APHIS), USDA proposed a new rule allowing chilled or frozen Brazilian beef from select provinces to be imported into the United States. That rule was finalized in August 2016. In November 2016, the World Animal Health Organization notified the government of Brazil that the entire country would be considered FMD free due to vaccination as of 2018.
Brazil’s reputation as a reliable exporter of meat and livestock products took a considerable hit on March 22, 2017 when it was disclosed that an investigation was underway into a scheme in which federal meat inspectors were bribed to allow tainted or out-of-date meat products to be exported from meat processing facilities. The government suspended exports from 21 specific facilities, but many countries immediately responded by barring all meat trade from Brazil. Many countries relaxed those bans once they could determine from which plants imported product originated. On that same day, USDA’s Acting Secretary of Agriculture announced that no beef imports currently in the United States food supply came from the suspect plants, but that the Food Safety Inspection Service would initiate re-inspection and additional pathogen testing of all beef of Brazilian origin coming into the country for an indefinite period.