By: James Peacock
In a decision that was publicly announced on June 22, United States Secretary of Agriculture Sonny Perdue issued a suspension on all fresh beef products imported from Brazil. This decision comes after the United States Department of Agriculture’s Food Safety Inspection Service had been closely monitoring Brazilian beef for potential issues. Scandals and other international bans called into question the quality of products being exported from Brazil, the world’s largest beef producer. The USDA responded by ordering that all Brazilian beef would be inspected prior to being sold in the United States. These inspections revealed a shocking number of questionable products. More than 100 lots of imported beef were removed from the market by the USDA. This totaled almost 2 million pounds of beef. Around 11% of beef imported from Brazil was discovered to have some sort of issue by inspectors, drastically higher than the rate of rejection for beef imported from other countries, which usually hovers around 1%. None of the rejected lots were sold the public.
This turn of events comes less than a year after Brazilian beef was allowed in US markets. The 13-year long ban on Brazilian beef was lifted in August of 2016 after the USDA declared that the Brazilian food safety system was considered equivalent to US standards. Scandals that hit the meatpacking industry shortly after the opening of US markets called this decision into question. The USDA was also pressured to ban Brazilian beef by legislators, especially by Jon Tester. The Montana Representative introduced legislation that would ban Brazilian beef for 120 days, in order to allow the USDA to properly investigate potential issues in the beef products. Others have pressured President Trump to remove the equivalency status given to the Brazilian food safety system.
While 106 lots of Brazilian beef were halted prior to being offered for sale, there is still Brazilian beef on sale in the United States. This can present a potential problem for retailers. On the one hand, there may be potential problems with imported beef, but that is not a certainty. Retailers, though, may not want to sell beef from a country that has recently been disallowed from importing their products into the United States. Removing the potentially adulterated products may prove to be difficult, though, as there is no longer a requirement for products to be labeled with what country they originated from. The Consolidated Appropriations Act 2016 removed the Country of Origin Labeling requirements for beef and pork products. This means that it is impossible to remove all Brazilian beef, because for many of these products it will be impossible to tell what country they actually came from.
Brazil’s Inspection Problems
Brazil remains the largest exporter of beef in the world, and its meatpacking industry is one of the driving forces of the national economy. Exported beef products earn the country tens of millions of dollars every week. Recently, though, this industry was hit with a series of scandals dealing with corruption and bribery. Various authorities have accused Brazilian inspectors of allowing spoiled and tainted meats to be sold. Inspectors may have been bribed to allow the shipping of expired meat to take place. The allegations also extend to the use of water and manioc flour in an effort to mask the appearance and smell of expired meats. In some cases, companies were allowed to pick their own inspectors. When FSIS inspectors were sent to Brazil to conduct equivalency audits, they were not paid by the federal government and were having meals and transportation subsidized by the companies that they were inspecting. Brazilian police recently leveled allegations of corruption against JBS and BRF, two of the largest meat processing firms in the country. JBS, in terms of sales, is the largest meat processing company in the world. Brazilian police have also issued 38 warrants in connection with their investigation.
International Importation Limitations
The United States has not been the only country to limit or ban the amount of Brazilian beef imports. In fact, the United States is only the most recent country in a long line to limit imports. The European Union, China, Chile, Hong Kong, Japan, Canada, Mexico, and Switzerland have all also enacted at least partial restrictions. Imported beef was stopped by health officials from the European Union after it was discovered that there were multiple issues with the products. Salmonella, E. coli, drug residues, and other major issues were found upon inspection. China has also reported issues with beef products imported from Brazil. Although they have not announced a complete embargo, China’s Agriculture Minister, Blairo Maggi, has stated that the country would not allow imported beef products to be shipped to local markets. China’s actions against Brazilian beef importation are significant, as Brazil is the largest beef supplier to the country. Brazilian imports make up around 31% of beef products sold in China. Several retailers have also elected to pull Brazilian beef products from their shelves. Most notably among this list are Sun Art Retail, the Chinese branch of Walmart, JD.com, and the Chinese arm of Metro AG. Hong Kong supermarket chain PARKnSHOP has also reported pulling Brazilian beef from its shelves.
The US ban on importation comes as Brazilian President Michel Temer meets with officials in Norway and Russia in an effort to, among other things, expand beef exports. Brazilian officials have spoken out repeatedly about the US ban, mostly reassuring consumers that the issues that had been uncovered were minor sanitation issues. Other officials have blasted the decision, saying that the US did not give Brazilian meat companies enough time to adapt to the strict US standards. Luis Rangel, Brazil’s Plant and Animal Health Secretary, has stated that the US market is the most demanding that Brazil exports to. Abscesses, one of the main issues cited by the USDA, were explained by Brazilian officials to likely have been caused by a reaction to foot and mouth disease vaccination. Rangel had said that because exported beef is sometimes not cut into small pieces, identifying the abscesses could be much harder.
Both Rangel and one of the leading workers’ unions, the ANFFA, have blamed budget cuts and understaffing as some of the reasons for issues in the meatpacking industry. The decline of inspection staff has been ongoing for quite some time, as the number of inspectors has fallen from 3,200 in 2002 to 2,600 today. In this same amount of time, the number of meatpacking facilities doubled. Currently, about 270 facilities have no inspectors at all. These facilities make up about 6 percent of the facilities in Brazil. The ANFFA has also stated that understaffing has helped increase the corruption problem, citing that inspectors who work in tandem are much harder to bribe than inspectors who work alone. The Brazilian government, to make matters worse, cut the Agriculture Ministry’s budget by 45% in March in an effort to curb the record-setting budget deficit plaguing the country. Luis Rangel has announced the ministry’s intention to hire 1,600 new inspectors to increase the number of inspectors by 50% in an effort to help ease issues in the food safety system. With the Brazilian government wrapped up in a myriad of corruption scandals, only time will tell if the food safety system in that country will return to standards required for importation into the United States.