USDA Announcement on U.S.-Brazil Beef Trade

On Aug. 1, USDA announced that Brazil is reopening to exports of U.S. beef for the first time since the first U.S. BSE case was confirmed in December 2003. The news release also notes that in a separate decision, FSIS recently determined that the United States can safely import fresh (chilled or frozen) beef from Brazil. Currently, beef imports from Brazil are limited to cooked and canned products. These restrictions are related to concerns about foot-and-mouth disease. Please note that further steps are necessary before shipments can begin in either direction. USMEF will report further on this issue as more details become available, and when the export certificate for U.S. beef to Brazil is posted in the Food Safety and Inspection Service (FSIS) Export Library.

The potential for U.S. beef and beef variety meat exports to Brazil will be fairly limited in the near term, due in part to Brazil’s economic situation and the weak real. However, USMEF foresees more significant medium-term opportunities for exports of high-quality U.S. middle meats and picanha (or coulotte, a top sirloin cap cut that is very popular in Brazil) for use in the foodservice and high-end retail sectors. U.S. beef will be differentiated and marketed as a unique product in the upscale sectors of metropolitan areas such as Sao Paulo and Rio de Janeiro. There are also opportunities for U.S. liver exports, as beef livers are a popular item in Brazil and command relatively high prices. The U.S. is the largest exporter of beef livers in the world and has been looking to diversify its liver markets since Russia closed to U.S. beef in 2013.

A look back at the years prior to December 2003 shows sporadic success for U.S. beef in Brazil – which is not surprising considering its volatile currency and fluctuating domestic supplies. In 2003, U.S. beef exports to Brazil totaled just 312 metric tons (mt) valued at about $475,000. This was down from 552 metric tons in 2002, valued at $1.2 million. The years in which U.S. exports to Brazil reached their most significant levels were 1997 (2,659 mt, $12.9 million) and 1998 (6,947 mt, $17.4 million). During those years, Brazil was a relatively small exporter of beef (less than 200,000 mt per year in 1997-98), and its primary import suppliers were the same as today: Paraguay, Uruguay and Argentina. Since that time, Brazil’s production, consumption and exports have surged while imports have declined (126,000 mt in 1997 compared to the recent high of 60,000 mt in 2014).

Brazil’s 2016 beef imports (through July) are up 7 percent from a year ago to 30,178 mt, with Paraguay (20,181 mt, +26.5 percent) the largest supplier, followed by Uruguay and Argentina. Most of the product is chilled beef (21,333 mt, +22 percent), with frozen (7,412 mt, -20 percent) and livers (1,411 mt, -5 percent) accounting for the remainder. Australia was a significant supplier (nearly 4,000 mt in 2014) before the recent devaluation of the real and sharp slowdown in Australian production.

The U.S. industry has demonstrated its ability to compete in the South American market, especially when not facing the intense disadvantage of a strong U.S. dollar. U.S. beef/beef variety meat exports to South America increased from just $6 million in 2003 to a record of $118.45 million in 2014, before slipping to $94.7 million in 2015. Free trade agreements in key markets such as Chile, Peru and Colombia have helped, and fortunately Brazil’s import duties (10 to 12 percent) are not prohibitive.


Once Brazil is approved to export fresh/frozen beef to the United States, it will compete for the “Other country” TRQ because Brazil does not have a country-specific designation like several other major suppliers to the U.S. market, such as Australia, New Zealand and Uruguay. Canada and Mexico can ship unlimited volumes at zero duty through NAFTA, and Australia can ship at zero duty, within-quota, through its free trade agreement with the United States. Like all other in-quota imports, beef from Brazil will be subject to the 4.4 cents per kilogram rate until the “Other” quota is filled. All out-of-quota imports face a 26.4 percent tariff. Last year 68 percent of the “Other” quota was filled, with nearly 80 percent of that product coming from Nicaragua.

Imports from Brazil are expected to mainly compete with imported product from Australia, New Zealand, and Uruguay, as these are the United States’ primary suppliers of lean manufacturing beef. Brazil will also mainly compete with Central American suppliers (Nicaragua, Costa Rica and Honduras) and Ireland for quota volume, as the “Other” tariff rate quota (TRQ) is managed on a first-come, first-served basis. Through CAFTA, all TRQs and duties on Central American beef will be eliminated in 2020. Until then, Brazil and any other countries gaining access to the U.S. will compete for the “Other” TRQ. Argentina is the exception, because it has a country-specific TRQ of 20,000 mt.

More details on U.S. TRQs are available online

Sources: USDA Foreign Agricultural Service, Global Trade Atlas