U.S. measure on beef could benefit Brazil

“Today, I concluded a deal to substantially lower the price of ground beef for working American families,” Trump said on the social media platform. “We have a commitment that this beef will be sold at 25 percent below current market prices,” he added.

Trump did not say which countries will supply the beef. The measure follows other U.S. government efforts to increase beef supplies in the U.S. market and curb rising prices, including an expansion of beef imports from Argentina and the resumption of live cattle purchases from Mexico for slaughter. The U.S. cattle herd is one of the smallest in more than 70 years.

After the announcement, the Brazilian Association of Meat Exporting Industries (Abiec) said in a statement that it had not received official information on how the measure would be implemented or details on the volumes and countries that could be included. It said, however, that “a potential expansion of the tariff-rate quota could benefit Brazil.”

The association noted that Brazil currently shares a quota with other suppliers. Once the quota is exhausted, Brazilian exports are subject to an additional 26.4% tariff. “Therefore, any expansion that includes Brazil could improve the conditions for Brazilian beef to access the U.S. market,” it said.

Later Friday afternoon, Trump returned to the issue. “We want to get the beef prices down, so we’ll get them down a little bit, and that’s what people want. That’s what the voters want, and that’s what I want,” he told reporters before boarding Air Force One for Myrtle Beach, South Carolina.

“The [American] ranchers are great. They’re my people. I love the ranchers. They’ve done a fantastic job, but they admit that we need a little help, and in order to get the prices down, so that’s what we’re doing,” he said.

Fernando Iglesias, an analyst at Safras & Mercado, said Brazil could capture as much as 120,000 tonnes of the authorized volume. According to him, Brazil is well positioned in terms of plants authorized to sell to the U.S. and its potential supply of lean beef to meet U.S. demand.

Iglesias estimates that Brazilian meatpackers could account for 30% to 40% of the total volume. From January through July, Brazil exported 223,800 tonnes of beef to the United States, generating $1.5 billion in revenue.

Source: Valor International/Globo Rural