(Corrects paragraphs 2 and 18 to show China will likely test
for residue of beta-agonists in beef instead of banning beef
from cattle fed the drugs)
* Deal to resume U.S. exports to China raises farmers' hopes
* U.S. producers set to track cattle to meet China rules
* Agreement would prohibit use of growth-promoting drugs
* U.S. may challenge top beef exporter Brazil in China
By Tom Polansek
CHICAGO, May 19 Talks on restarting U.S. beef
exports to China are moving fast and final details should be in
place by early June, the U.S. Department of Agriculture said on
Friday, allowing American farmers to vie for business that has
been lost by rival Brazil.
As part of a trade deal, U.S. ranchers are set to face tests
over the use of growth-promoting drugs to raise cattle destined
for export to China and to log the animals' movements, according
to the USDA.
The two sides are negotiating to meet a deadline, set under
a broader trade deal last week, for shipments to begin by
Finalizing technical details in early June should mean beef
companies, such as Tyson Foods Inc and Cargill Inc
, can sign contracts with Chinese buyers to meet the
deadline, the USDA said.
China banned U.S. beef in 2003 after a U.S. scare over mad
cow disease. Previous attempts by Washington to reopen the
world's fastest-growing beef market have fizzled out. But now,
the quick progress of the latest talks is raising hopes of U.S.
"Both sides feel the urgency to get it done by the
deadline," said Joe Schuele, spokesman for the U.S. Meat Export
Federation, which represents Tyson, Cargill and other meat
China's embassy in Washington could not immediately be
reached for comment.
The timing of the new deal allows U.S. producers to benefit
as Brazil, the world's top beef exporter, is struggling with
scandals and rival shipper Australia is suffering from a drought
that is hurting production, analysts said.
China accounted for nearly one-third of the Brazilian meat
packing industry's $13.9 billion in exports last year.
But in March, Beijing briefly banned Brazilian imports after
Brazilian police accused inspectors of taking bribes to allow
sales of rotten and salmonella-tainted meat.
JBS SA, the world's largest meatpacker, was
involved in the probe and in separate allegations this week that
Brazil's president conspired to obstruct justice with the
The food-safety probe hit Brazil's beef exports, which fell
by 24.6 percent to $378 million in April from March, according
to Abiec, an industry group that represents meat processors
accounting for about 90 percent of Brazil's exports.
"This is a very opportune time for the U.S. to step up,"
said Derrell Peel, an agricultural economist at Oklahoma State
Chinese appetite for beef has climbed due to its expanding
middle class. In 2003, its imports totaled just $15 million, or
12,000 tons, including $10 million from the United States,
according to the USDA.
Brazilian exporters hope China's trade deal with Washington
will not inflict more pain on meat companies in the country
because U.S. exporters will be targeting different, higher-end
customers, said Abrafrigo, an association representing Brazil's
To reopen U.S. trade, Beijing has accepted a U.S. proposal
in principle that would require producers to document the
locations where cattle raised for beef exported to China are
born and slaughtered, the USDA said. The system would be less
onerous than tracking cattle throughout their entire lives,
during which they can be kept at up to four different locations.
Peel, a livestock expert, estimated that U.S. producers
trace the movements of less than 20 percent of the nation's
Under another proposed rule, U.S. beef exported to China
must pass tests showing it is free from detectable residue of a
class of growth-enhancing drugs known as beta-agonists that
includes Elanco's Optaflexx, according to the USDA. Elanco,
owned by Eli Lilly and Co, declined to comment.
A trade group for veterinary drug companies, the Animal
Health Institute, said China should accept beef from cattle
raised with beta-agonists because they are safe.
U.S. beef shipments to China also will have to come from
cattle under the age of 30 months, according to the USDA. Most
U.S. cattle will meet that requirement, the U.S. Meat Export
The terms of the deal are a win for the United States over
Canada, which is approved to ship only frozen beef to China.
China already bans meat from Canadian cattle fed with
Optaflexx, according to the Canadian Meat Council. It also
requires that Canadian beef be produced from cattle that are
less than 30 months old and can be tracked to the farm where
they were born.
(Additional reporting by Ana Manao in Sao Paulo; Editing by