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U.S. Lifts Ban on Brazilian Beef, Threatening Ranchers and Consumers
Food safety officials lifted a ban on Friday on Brazilian beef imports, introducing a potential windfall for multinational meatpackers and significant threats to American ranchers and consumers.
The U.S. had banned imports of raw beef from Brazil in June 2017, following an international food safety scandal in which several Brazilian meatpackers bribed health inspectors to ship rotten and tainted meat around the world. The ban included the world’s largest meatpacker, JBS, which is currently under investigation by the Justice Department for bribing public officials to help finance massive acquisitions of leading U.S. meatpacking corporations.
Despite passing recent audits by the USDA Food Safety Inspection Service (FSIS), food safety advocates argue that Brazilian beef still poses a risk to U.S. consumers. Meanwhile, farmer and rancher organizations feel threatened by competition from cheap Brazilian beef, especially because imported beef does not need to carry a country-of-origin label and can even be labeled as a product of the U.S.A. if it is repackaged in a U.S. facility.
“Consumers cannot distinguish this cheaper beef from the superior, safer, and higher-quality beef produced by America's cattle farmers and ranchers,” said Bill Bullard, CEO of the Ranchers-Cattlemen Action Legal Fund (R-CALF), in a statement. The strategic use of cheaper, undifferentiated imports from Brazil will cause financial harm to domestic ranchers and farmers by destabilizing the U.S. cattle market, he added.
The U.S. placed a ban on raw beef from Brazil after Brazil’s Federal Police found that several meatpackers had bribed health inspectors to approve expired and adulterated foods and falsify sanitation permits. An investigation revealed that government health officials and leading global meatpackers, including JBS and BRF, had used carcinogenic acids to mask rotten meat and deliberately approved meat products contaminated with salmonella, among other transgressions.
JBS is also under at least two investigations by the Justice Department, one for colluding with other U.S. poultry processors to raise the price of chicken, and another for violating the Foreign Corrupt Practices Act. JBS executives have admitted to giving roughly $150 million in bribes to more than 1,800 government officials over several years to receive favorable financing from Brazil’s state-owned bank, among other benefits. JBS used these funds to finance major acquisitions across the globe, including the takeover of Swift & Co., then the third-largest U.S. beef and pork packer, as well as Pilgrim’s Pride, then the world’s second-largest poultry processor. JBS has already agreed to pay $3.2 billion to settle a Brazilian corruption case for these charges.
The FSIS conducted an audit earlier this year and last summer to determine whether raw beef from Brazil met U.S. food safety standards and addressed the concerns of previous audits. FSIS concluded that Brazil’s food inspection systems were sufficient, but the advocacy group Food & Water Watch contends otherwise. In a statement, the organization pointed to Brazil’s long history of food safety violations as well as to a recent study in which Brazilian microbiologists found that almost 70% of sampled beef factories contained strains of listeria. “The Brazilian meat inspection system is still out of order and should be treated as such,” said Tony Corbo, senior government affairs representative for Food & Water Action, in the statement.
To make matters worse, consumers have no way of knowing whether they’re buying beef from Brazil. Since the repeal of mandatory country-of-origin labeling for pork and beef, many meat products do not need to disclose where they came from. Because of a labeling loophole, raw beef imported and repackaged in a U.S. facility can be labeled a U.S. product, misleading consumers even further.
Nearly 500 cattle producers and a coalition of more than 20 agricultural organizations rallied last fall to contest this policy, calling for a halt to the United States-Mexico-Canada Agreement until mandatory country-of-origin labeling was reinstated. They did not succeed, and now ranchers worry that an influx of cheaper, mislabeled Brazilian beef will undercut U.S. producers already feeling squeezed by multinational meatpackers. The Brazilian corporations JBS and Marfrig are two of the four largest beef packers in the United States.
“Producers here will be forced to take whatever price is offered to them,” says Angela Huffman, executive director of the Organization for Competitive Markets (OCM). “That’s already the case a lot of the time, but it will be true even more so now, [when] these corporations have unfettered access to the market.”
The USDA’s own economic analysis of this decision estimated that Brazilian raw beef imports could result in losses of $143 million for U.S. cattle producers. The agency rationalized this blow by saying consumers could benefit from cheaper beef. In practice, however, the price consumers pay for beef has remained flat or increased in recent years, even as the price paid to beef producers has fallen. All this leads groups such as OCM and R-CALF to contend that consumers only stand to lose trust in their beef supply, given Brazil’s food safety concerns. Meanwhile, packers will profit from further squeezing ranchers in both the U.S. and Brazil.
“We just don’t see anything positive about it for anybody except JBS and Marfrig,” says Huffman.
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About the Open Markets Institute
The Open Markets Institute promotes political, industrial, economic, and environmental resilience. We do so by documenting and clarifying the dangers of extreme consolidation, and by fostering discussions of ways to reestablish America’s political economy on a more stable and fair foundation.
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