Two confirmed cases of “atypical” mad cow disease in Brazil have put additional strain on China’s beef supply options.
Brazil’s suspension of beef exports to China this weekend comes less than a week after Argentina’s decision to extend its beef export restrictions as part of an effort to rein-in domestic inflation. Argentina’s beef shipments will be capped at 50% of the previous year’s level through the end of October.
Brazil and Argentina’s reduced exports will likely force China to rely more heavily on the United States. US beef export commitments to China have already increased over 400% compared with this time last year, largely due to Argentina’s food inflation woes and Australia’s drought. Australian beef is also subject to Chinese trade restrictions related to a suit involving several commodities.
Like Brazil, Argentina is a top supplier to China, but Brazil’s momentary halt on beef exports is expected to deal a major short-term blow to China.
Brazil, the world's largest beef exporter, supplies nearly 40% of China’s frozen beef imports, and China’s appetite for beef has been surging since African swine fever was detected in China back in 2018. China’s frozen beef imports from Brazil jumped 112% between 2019 and in 2020, and 2019’s imports were more than 2.5 times the 2018’s level.
Brazil’s export halt, which went into effect on Saturday, was declared in compliance with health protocols between the two countries. Beijing is set to decide when it will begin importing again.
“Atypical” mad cow is considered to be of lower risk than the classical form of the disease, as it occurs naturally and only sporadically in older cattle. “Classical” mad cow disease, or bovine spongiform encephalopathy (BSE), is transmitted by contaminated feed. A cow gets BSE by eating feed contaminated with parts that came from another cow that was sick with BSE.
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