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Pork Commentary

Jim Long, President-CEO Genesus Inc.

March 27, 2017

Brazil – Glass House Syndrome

 

The Brazil Meat Scandal is a big deal in Brazil and has global ramifications.

The gist of the event is that allegedly some meat packers in Brazil bribed food sanitation inspectors to approve sales to domestic and foreign buyers.

The same allegations include details of smelling and expired meats that were improved by using chemicals and cheaper products like water and manioc flour.

The scandal has had big ramifications with China, a large market for Brazil’s chicken, beef and pork, which has banned all imports. The EU, Canada, the US, and others, have also put in place various forms of import controls.

Brazil’s trade associations for beef, pork, and poultry producers warned the scandal could have a massive effect on employment and the economy because the sector’s exports represent 15% of total exports. Brazil’s Total Meat Exports are around $13 billion USD per year.

“Don’t throw stones if you live in a Glass House” is our way of saying that when you are in an export position like the EU and North America in the pork industry, a few bad actors like in Brazil can jeopardize the whole industry. Brazil needs export market access. So does North America and the EU. Lack of market access is a big risk for all. The sad part is that independent swine producers in Brazil are having their financial position put in jeopardy due to these bad actors.

Not sure what’s happening but if the product can’t be sold due to bans, cattle can be kept as they don’t need immediate slaughter. Chickens? Swine? Not many systems have the ability to hold inventory for long. Things can get backed up real fast. If bans stay long, it could get to be a bigger mess.

If bans cut Brazil’s exports significantly for any length of time, we expect global meat prices will increase. Brazil is the world’s largest exporter of chicken and beef, and a major pork exporter.

Quote – “We all live in glass houses, and no one has clean windows.”

 

 

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This post was written by Genesus