EIGHT weeks have now passed since the Brazilian government announced the detection of two cases of atypical BSE in meat plants in the states of Minas Gerais and Mato Grosso and subsequently suspended beef trade with China.
Return to trade is entirely at China's discretion and given its heavy dependence on Brazil for beef and the precedent of a similar incident in 2019, it was widely believed that shipping would recommence within a fortnight.
Considering the economic significance of this trade halt, it should by now have attracted wide in-depth analysis from the market watchers that the finance/economics sector takes notice of.
But all that has appeared to date is a single Financial Times report that Brazil's agriculture ministry claims to have been totally transparent with the Chinese health authorities and are baffled by the continuation of the ban.
While most commentators seem to have accepted that there is nothing at issue neither in terms of human and animal health nor with Brazil's handling of the incident, the National Cattlemen's Beef Association in the United States stood out as a dissenting voice calling for closer scrutiny of the matter.
NCBA's chief executive officer, Colin Woodall, issued a statement saying, "Given Brazil's history of failing to report BSE cases in a timely manner, we must remain vigilant in enforcing our safeguards and holding them accountable."
Woodall went on to call upon the US Department of Agriculture to "examine Brazil" in regard to the incident.
If there is a need to question whether Brazil has acted in a timely manner in this instance, as suggested by NCBA, it might help to explain why an estimated 100,000 tonnes of Brazilian product (according to the FT report) supposedly health-certified before the suspension, has been caught in limbo with China refusing entry.
In these sorts of circumstances, product on the water can often be accepted provided documentation is in order and confirms that production pre-dates the incident, but not, it seems, on this occasion.
Unlike Australia, Brazil does not appear to have suffered any fallout in relations with China so political sensitivities would seem less likely to be implicated than some actual or suspected anomaly in certification/documentation.
On the other hand, it could simply be a matter of China adopting a more stringent attitude to BSE and health matters generally.
Ireland has yet to have its China beef-export suspension lifted after discovery of an atypical BSE case there last year.
Britain too has had its access to the Chinese beef market banned once again.
Its latest ban took effect on September 29 after a BSE case was detected in Somerset. China had yet to restart buying British beef after agreeing in 2019 to lift the previous ban imposed in the 1990s.
But Ireland is not so much concerned about when its suspension might be lifted by China. Rather, it sees serious impact on its beef trade with other EU member states if Brazilian beef displaced from the China market ends up being exported to the EU. The EU has not imposed any restrictions on Brazilian beef after the BSE detections.
Ireland seems convinced there must be a growing stockpile of frozen beef in Brazil but that may not necessarily be the case.
Bloomberg reported earlier this month that Brazil-based consulting firm Scot Consultoria estimated that half of Brazil's slaughter capacity was idle in September.
The report added that further idling of capacity would occur in October as the China ban continues and domestic demand is impacted by high unemployment and runaway inflation.
Rather than a growing frozen beef stockpile, what might be happening instead is a growing backlog of slaughter-ready cattle.
Whatever the case, downward pressure on Brazilian cattle and beef prices would seem certain if the China ban continues for any length of time.
At the moment, Brazilian lean beef exports to the US are increasing albeit off a very low base but all it would take for this to grow exponentially is for US end users to include Brazilian product in their specifications.
Brazil does not have unlimited access into the US market under the current tariff rate quota arrangements but if their cattle were cheap enough and the Brazilian Real remains in a severely weakened state, the out-of-quota tariff of 26.4pc may be no great disincentive.
Fortunately for Australia the big US burger chains may be inclined to remain hesitant on use of Brazilian product given that country's historical food-safety corruption issues and Amazon land clearing controversy.
Short weeks despite extra money incentive
IT was only a week ago when the Queensland majors adjusted their grid rates up by a substantial 20-30c/kg in an attempt to keep kill rosters as full as possible for the remaining weeks of the year.
That took four-tooth ox to 780-785c and heavy cow to 750c where they remain this week.
However despite the extra cash, Biloela and Lakes Creek will pull back to four days this week and foreseeably continue at that level for the remainder of the year until shutdown.
For Biloela that will likely be December 6 and as close as possible to Christmas for Lakes Creek.
The markets, meanwhile, look to have some numbers with 6000 showing for both Roma and Dalby this week.
However the problem is that there are very few kill cattle among these. Out of the 4000 head at Dalby last week there were just 10 bullocks and 113 heavy cows for the processors to share.
In the south there are reports of a few starting to come through around Naracoorte but virtually nothing so far in the Riverina and Victoria.
On the meat side of the business, exporters have been able to write a little more on trimmings and grinding beef.
Steiner reported increased interest in the US imported beef market as end users looked to cover needs through the end of the year and early 2022.
90CL was quoted up 3 cents at US289c/lb FOB East Coast.
