Arkansas Democrat Gazette, AR
08-25-07
S. Korea to reopen market to U.S. beef
BY DAVID IRVIN
South Korea said Friday it would begin inspecting U. S. beef again next week,
effectively reopening the market to domestic producers like Springdale-based
Tyson Foods Inc.
Three weeks ago, officials in Seoul stopped inspecting U. S. red meat after a
banned vertebral column was discovered in a shipment from Minneapolisbased
Cargill Inc. Since January, Korea has blocked — and then unblocked — U. S.
beef shipments at least three times after its inspectors found specific risk
materials for bovine spongiform encephalopathy, or mad-cow disease.
Some of those bans were specific to a few processing plants, while others
affected the entire U. S. beef industry. Friday’s announcement will allow the
release of 6, 800 tons of beef sitting in Korean warehouses, and is seen as a
positive step toward normalizing beef trade, industry sources said.
That’s good news for Tyson, which had to trim beef production when Korea
suspended inspections Aug. 3.
“We’re pleased South Korea has lifted the suspension. We look forward to
resuming production and shipments as soon as possible so we can serve our
South Korean customer and consumer base,” Tyson spokesman Gary Mickelson
said in an e-mail Friday.
Tyson is the world’s largest meat producer and sold about $ 1. 6 billion in beef
internationally in 2006.
Renewed beef trade with Korea is also good news for U. S. pork producers, who
stand to gain much if the U. S.-South Korea Free Trade Agreement is ratified by
legislative bodies in both countries.
Congressional leaders have made it clear that the free trade agreement will not
be ratified unless Korea fully re-opens its beef market. For that to happen, Korea
will have to amend its rules and allow bone-in beef products. Even after Friday’s
announcement, Korea continues to prohibit beef from cattle older than 30 months
and requires all meat be devoid of bones or spinal material.
“This would be the single most important trade agreement ever for the U. S. pork
industry,” said Dave Warner, director of communications for the National Pork
Producers Council, in a telephone interview Friday.
Pork exports will increase to 600, 000 metric tons annually — twice the amount
Japan buys currently — once the trade agreement is fully implemented, said
Dermot Hayes, an economist and researcher at the Center for Agriculture
and Rural Development at Iowa State University in Ames, Iowa. Beef
shipments will increase to 154, 000 tons annually, Hayes will report in a
forthcoming paper.
However, it is now unclear when Korea would amend its strict import regulations
on U. S. beef.
The U. S. Department of Agriculture has asked the Korean government to adhere
to the World Organization of Animal Health’s assessment that U. S. beef is a
“controlled risk” for mad-cow disease.
Originally, officials in Seoul said they would conclude amending their trade rules
by September.
However, Korean officials said they stopped work on the import rules after
inspections ceased earlier this month.
“We’ll have a good idea in the next couple of weeks on how this is going to
move,” USDA spokesman Keith Williams said in a telephone interview Friday.
Williams emphasized that Korea has yet to make the decision to allow bone-in
beef, but he expects the new rules to be published after a public comment period
ending around mid-October.
South Korea and about 60 other countries blocked U. S. beef in December 2003
after mad-cow disease was discovered in a Washington-state cow. Before that,
Korea was the third-largest U. S. beef buyer. Korea resumed inspections of U. S.
beef in 2006, but a series of trade flaps have agitated the process of limiting
trade restrictions.
This all occurred as intense negotiations took place between the U. S. Trade
Representative and officials in Seoul over a massive free-trade agreement that
would benefit many U. S. industries.
Lynn Heinz, vice president of information services at the Colorado-based U. S.
Meat Export Federation, said any future errant shipments of banned products
would likely cause another stoppage in meat inspections.
“Are they pushing it ? Yeah, they probably are; but the bottom line is that is what
our government agreed to, and that is what we are trying to live up to,” Heinz
said Friday.
South Korea’s ban of U. S. beef earlier this month led to a precipitous drop in
cattle futures prices on the Chicago Mercantile Exchange. Analysts at the
exchange said Thursday that live-cattle and feeder-cattle futures have turned
bullish, and they continued to increase in value in Friday trading. Cattle contracts
for October increased 97. 5 cents per pound. Shares of Tyson Foods rose 26
cents or 1. 2 percent to close at $ 21. 86 in Friday trading on the New York Stock
Exchange.
To contact this reporter: dirvin@arkansasonline. com