14. New Prospects for Brazilian Beef Exports

Brazil, Latin America’s biggest nation, is trying to catch up with meat producers in rich, industrialized nations by adopting and adapting their technologies and farming techniques. As a result, it is closing the productivity gap with its main competitors, the U.S. and Australia. Brazilian cuts of meat have muscled in on new markets in Europe, Asia and the Middle East, tripling the sector’s exports to more than 750,000 tons in three years, and making Brazil the world’s No.3 beef exporter, although it exports only ten percent of its total production.

Today, Brazil boasts the world’s biggest commercial herd, with 165 million head. Worth US$120 billion last year, agribusiness made up 20 percent of Brazil’s gross domestic product and employs about 14 million people. “Thanks to technological advances, we have multiplied the number of grass-fed cattle per hectare by nine,” said Edivar de Queiroz, president of the country’s beef exporters’ association ABIEC. “And we have reduced seasonal drops in production,” he added. “That’s fantastic progress.”

So far, it has been mainly sprawling ranches such as the ones Mr Queiroz keeps in Sao Paolo Rondonia and Goias states that have adopted new technology. But smaller ranchers are also investing in new technology. Marcelo Lima has pioneered simple but effective technologies on his 700-hectare ranch some 500 km northwest of Sao Paolo. The new technologies, which cost him US$119,000, are fairly basic—correcting soil acidity and fertility, pasture rotation, a clean drinking water system, moving cattle round as little as possible between fields and, cost-controlling computer systems—but they have had an impressive effect.

Mr Lima pointed out that there is a great demand abroad for beef such his healthy cattle provide—lean, hormone-free and raised just on grass, salt and water—because European and Asian countries are plagued with epidemics of mad-cow disease and foot-and-mouth disease. At the same time, the technique of artificial insemination is gradually raising the quality of Brazil’s cattle herds. “There has been a revolution in the quality of stock over the past decade, thanks to new breeding techniques,” said Luis Alfredo Deragon, technical director of Nova India Genetica. In addition, he pointed out, many of Brazil’s cattle are hybrids of Indian, European and Brazilian stock that provide better beef in the country’s tropical climate.

As Brazilians love their beef, only about one tenth is exported. But that is changing, as exporters learn to specialize in the cuts of meat that export markets want, such as ground meat and hamburger meat. “What we have to do is produce a more sophisticated product, with more value added, to make it more attractive to customers abroad,” Mr Queiroz said. “At the moment, our beef is shipped as a commodity which needs to be processed at the other end, and so is priced as a commodity. We need to Start shipping ready-cut steaks that go straight onto the supermarket shelves. By shipping ready-packaged beef, we can improve the mark-up by between ten and 20 percent,” he explained.

Another strategy for boosting Brazil’s beef exports is espoused by Samuel Giordano, professor of agribusiness at Sao Paolo University. “The country’s priority should be to include agribusiness, including beef, in the round of international trade talks agreed to last year in Doha,” he said. However, many in the business doubt that the rich, industriadized countries will open their markets or end subsidies that protect their farmers from the cheaper Brazilian competition. Mr Lirna said, “The only reason we can’t get a bigger world market share today is the huge amount of subsidies that the US and Europe give to their farmers.”

Adapted from an Associated Press article carried in the South China Morning Post

Questions 1—8
Complete the summary below. Choose ONE or TWO WORDS from the passage for each answer
Write your answers in boxes 1—8 on your answer sheet.

Summary
Brazil’s cattle raisers are striving to gain a bigger share of the world beef market by introducing new technologies which they hope will narrow the (1)_____ with its major competitors. As a result, (2)_____ now makes up one fifth of the Latin American country’s gross domestic product. Even smaller ranches are adopting new technology, including (3)_____ to monitor costs. Brazilian beef has a competitive advantage, as it is free from the (4)_____ that affect cattle in other countries. A technology which is doing much to increase the quality of Brazil’s cattle is (5)_____ . It has been pointed out that at the moment Brazilian beef is regarded by importers as a (6)_____ , and that it needs to have more (7)_____ in order to appeal better to foreign customers. An expert has suggested that Brazil should try to get its beef industry included in the 8 round of international trade talks.

Quetions 9—13
The reading passage contains a number of opinions provided by four different people. Match each opinion (Questions 9-13) with the persons quoted in the passage (A-D).
N.B. You may use any of the persons A —D more than once.

9. Brazilian beef exports are hampered by foreign subsidies.
10. Brazil must get its beef exports included in the Doha round of trade talks.
11. Brazil needs to export ready-cut beef.
12. Brazilian cattle are in demand abroad because they are free from epidemics.
13. New breeding techniques have revolutionized the Brazilian cattle industry.

A. Edivar de Queiroz
B. Marcelo Lima
C. Luis Aifredo Deragon
D. Samuel Giordano

Answer: 1-productivity gap, 2-agribusiness, 3-computer systems, 4-epidemics,5-artificial insemination, 6-commodity, 7-value added, 8-Doha, 9-B, 10-D, 11-A, 12-B, 13-C

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