Shipments to South Korea on hold

Cattle Market & Farm Reports, Editorials
Oct 9, 2006
by WLJ

—Lack of clarity preventing companies from trade.

USDA statistics showed last week that no beef has been shipped to South Korea since the border opened. Sources at major packers have said they are concerned about having shipments condemned in the event inspectors find even small fragments of bone in shipments of U.S. beef. Officials with the South Korean agriculture ministry have said they will have a zero tolerance policy regarding any bone fragments in beef products sent overseas. That stand means any product found containing bone fragments could be rejected or destroyed by government inspectors. That is a risk major exporters aren’t willing to take.

Lynn Heinze, U.S. Meat Export Federation vice president of information services, said vague responses and instructions from South Korean officials are the reason packers have not yet resumed shipments overseas.

“Individual companies will make their own decisions as to when they will resume shipments, but without additional guidance, it could be some time before shipments begin,” said Heinze.

USDA sent a high-level delegation to Korea in August in an effort to come to an agreement on an acceptable standard for a tolerance level for bone fragments in boneless beef shipments, but the South Koreans rejected the request. Sources at major packing companies said most don’t intend to ship overseas until a standard is reached. The border officially opened to shipments of boneless beef from animals under 30 months of age on Sept. 8.

USDA Foreign Agriculture Service officials said last week the agency would “continue to press Korea for appropriate beef trade protocols.”

The regulations, which U.S. officials had hoped to get changed quickly once trade barriers were lifted, said if problems are found, South Korea “may suspend temporarily export loading from the relevant meat establishment that produced the exported beef.” The regulations also state inspectors may “return the export beef to its origin or destroy it if discrepancies with the health requirements of Korea are found.”

In Hong Kong, which maintains similar standards to those imposed by South Korea, shipments from some U.S. plants were prohibited after the discovery of bone fragments in shipments of beef from multiple U.S. packing plants.

In 2003, the U.S. exported more than $814 million worth of beef to Korea, with boneless beef accounting for $449 million. A large portion of the remainder was bone-in product such as short ribs, which are popular in Korean-style barbeque dishes.

One source at a major U.S. packer said his company wouldn’t ship to Korea until a standard is met, a condition which was conveyed to USDA officials negotiating with South Korea even before the announcement to open the border was made. Until a standard is set, or at least the penalties for bone fragments are set forth, packing companies have too much to lose, according to that official.

Industry sources have said maintaining a zero tolerance for bone fragments is very difficult and more costly than it sounds. “The industry can probably do it on a small scale, but it would be very cost prohibitive and it’s unlikely they (South Koreans) would be willing to pay for it,” the source said.

Meanwhile, in an effort to ramp up supplies in light of the border closure, South Korean farmers have been increasing their herd size. This year, total cattle numbers in the country have risen sharply, according to the nation’s agriculture ministry. The South Korean beef cattle herd increased to a seven-year high of 2.02 million, up 3.2 percent in the latest quarter-to-quarter comparison. The herd has grown 37 percent since 2003 and is the highest since 2.09 million animals were recorded in September 1999. — John Robinson, WLJ Editor