When Brazil - the world’s biggest exporter of beef - stops sending beef to the world’s biggest importer - China - it is inevitable that it will have an impact on the global beef trade.
How great that impact is will be decided by how long the suspension remains in place.
In 2019, at the height of the African swine fever crisis in the Chinese pig herd, the discovery of an atypical BSE case in Brazil led to a suspension of beef exports for just two weeks.
However, the next case discovered in September 2021 led to an export suspension that lasted until mid-December.
Irish beef producers and exporters also know what this feels like. After an atypical case was discovered in Ireland in May 2020 shortly after the market opened to Irish exports, the suspension lasted until January this year.
Resumption of trade with China following a BSE case is entirely at their discretion and there is no apparent formula for deciding how long that will take.
Alternative options
If Brazil’s beef exports to China are suspended for a prolonged period, that will cause a significant disruption to global beef markets.
Brazil now accounts for almost one quarter of all beef exported in global markets, while China accounts for one quarter of all beef imported.
Some of the product destined for China could be sold in other global markets
However, there are options for any displaced beef though these would not be as financially attractive to the Brazilian meat industry.
Some of the product destined for China could be sold in other global markets.
Brazil’s beef exports to the EU declined significantly over the past decade as demand from China increased. If China is out of the market for a prolonged period, then it would be relatively straightforward to ramp up exports to EU markets.
Additionally, Brazil’s beef exports to the USA have been growing rapidly over the past two years and there is further growth potential for them in that market.
Shortfall
Australia - the third-biggest beef exporter in the world - is the third-largest supplier of imported beef to the US, but was at a four-decade low cattle slaughter in 2022.
So far, in 2023, Brazil has exported more beef to the US than Australia has and are in a position to pick up any shortfall in supplies from Australia.
The most important market of all for Brazilian beef is Brazil itself. Despite being the largest volume exporter of beef in the world, exports only account for between 20% and 25% of production.
There is potential to increase domestic consumption, though this would come at a cost to exporters because the reason so much beef was exported to China was because it was financially lucrative.
Opportunity for Irish beef?
There is no denying that if the biggest supplier is out of the market for any length of time, China will be looking elsewhere to fill the shortfall.
As Table 1 shows, Brazil accounted for 40% of beef imported by China between January and November 2022.
There are five other major suppliers, which, along with Brazil, supplied almost 94% of all beef that China imported. They will pick up some of the deficit in supply, but nowhere near all of it.
Irish exports are just re-entering that market after our own BSE-triggered suspension and, therefore, Irish exports are ideally placed to pick up some of the supply deficit.
It is best for Irish farmers and exporters to consider Brazil as an excellent bonus market
However, Ireland is only in a position to supply tiny volumes compared with Brazil, but, even so, it would be a valuable addition to Irish export options.
A note of caution however. The misfortune that has befallen Brazil can just as easily arrive for Ireland if another BSE case were to occur here.
It is best for Irish farmers and exporters to consider Brazil as an excellent bonus market to have access to, but given the recent prolonged suspension, it would be wrong to be over dependent on it.
The other dimension of Brazil’s suspension in China is that it would increase exports to Europe and the UK, which would be a threat to Irish exports.
Of course, China will not be dictated to by anyone on its import policy, but the interest of the Irish and global beef trade is best served by stability.
BSE is now a rare and diminishing global issue and is no longer a major concern for OIE, the World Organisation for Animal Health, with an agreed global policy for managing the occasional incidents that arise.
Irish and Brazilian interests would both be best served if China were to adopt this as its approach to trade, but this is unlikely.
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Brazil’s beef exports to China suspended as BSE case confirmed
When Brazil - the world’s biggest exporter of beef - stops sending beef to the world’s biggest importer - China - it is inevitable that it will have an impact on the global beef trade.
How great that impact is will be decided by how long the suspension remains in place.
In 2019, at the height of the African swine fever crisis in the Chinese pig herd, the discovery of an atypical BSE case in Brazil led to a suspension of beef exports for just two weeks.
However, the next case discovered in September 2021 led to an export suspension that lasted until mid-December.
Irish beef producers and exporters also know what this feels like. After an atypical case was discovered in Ireland in May 2020 shortly after the market opened to Irish exports, the suspension lasted until January this year.
Resumption of trade with China following a BSE case is entirely at their discretion and there is no apparent formula for deciding how long that will take.
Alternative options
If Brazil’s beef exports to China are suspended for a prolonged period, that will cause a significant disruption to global beef markets.
Brazil now accounts for almost one quarter of all beef exported in global markets, while China accounts for one quarter of all beef imported.
Some of the product destined for China could be sold in other global markets
However, there are options for any displaced beef though these would not be as financially attractive to the Brazilian meat industry.
Some of the product destined for China could be sold in other global markets.
Brazil’s beef exports to the EU declined significantly over the past decade as demand from China increased. If China is out of the market for a prolonged period, then it would be relatively straightforward to ramp up exports to EU markets.
Additionally, Brazil’s beef exports to the USA have been growing rapidly over the past two years and there is further growth potential for them in that market.
Shortfall
Australia - the third-biggest beef exporter in the world - is the third-largest supplier of imported beef to the US, but was at a four-decade low cattle slaughter in 2022.
So far, in 2023, Brazil has exported more beef to the US than Australia has and are in a position to pick up any shortfall in supplies from Australia.
The most important market of all for Brazilian beef is Brazil itself. Despite being the largest volume exporter of beef in the world, exports only account for between 20% and 25% of production.
There is potential to increase domestic consumption, though this would come at a cost to exporters because the reason so much beef was exported to China was because it was financially lucrative.
Opportunity for Irish beef?
There is no denying that if the biggest supplier is out of the market for any length of time, China will be looking elsewhere to fill the shortfall.
As Table 1 shows, Brazil accounted for 40% of beef imported by China between January and November 2022.
There are five other major suppliers, which, along with Brazil, supplied almost 94% of all beef that China imported. They will pick up some of the deficit in supply, but nowhere near all of it.
Irish exports are just re-entering that market after our own BSE-triggered suspension and, therefore, Irish exports are ideally placed to pick up some of the supply deficit.
It is best for Irish farmers and exporters to consider Brazil as an excellent bonus market
However, Ireland is only in a position to supply tiny volumes compared with Brazil, but, even so, it would be a valuable addition to Irish export options.
A note of caution however. The misfortune that has befallen Brazil can just as easily arrive for Ireland if another BSE case were to occur here.
It is best for Irish farmers and exporters to consider Brazil as an excellent bonus market to have access to, but given the recent prolonged suspension, it would be wrong to be over dependent on it.
The other dimension of Brazil’s suspension in China is that it would increase exports to Europe and the UK, which would be a threat to Irish exports.
Of course, China will not be dictated to by anyone on its import policy, but the interest of the Irish and global beef trade is best served by stability.
BSE is now a rare and diminishing global issue and is no longer a major concern for OIE, the World Organisation for Animal Health, with an agreed global policy for managing the occasional incidents that arise.
Irish and Brazilian interests would both be best served if China were to adopt this as its approach to trade, but this is unlikely.
Read more
Brazil's beef exports in jeopardy as BSE suspected
Brazil’s beef exports to China suspended as BSE case confirmed
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