S. Korea blocking U.S. beef imports
Posted on Friday, August 3, 2007
South Korea, Asia’s second-biggest beef importer, has halted imports of the meat from the United States after a shipment from Cargill Inc. was found to contain a bone part banned as a precaution against mad-cow disease.
South Korea’s quarantine authority found a piece of the vertebral column of a cow in one of 1, 176 boxes from a shipment imported on July 29 weighing 18. 7 metric tons, the Ministry of Agriculture and Forestry said Thursday in an emailed statement. Cargill said it had packaged the beef.
More than 60 other nations including South Korea banned U. S. beef in December 2003 after an animal with mad-cow disease was found in Washington state. Speculation that the ban might be reinstated caused cattle futures to fall Wednesday in Chicago. Futures fell again Thursday.
South Korea said it had stopped inspecting shipments from the United States.
“This effectively halts beef imports from the United States temporarily,” Park Kon Hyok, a spokesman for the Korea Federation of Meat Purveyors in Seoul said of the decision, which took effect Wednesday.
The measure will stay in force until the United States comes up with a “fundamental solution,” the ministry said.
Officials at Springdalebased Tyson Foods Inc., a major exporter of beef, said Ko- rea’s suspension of beef imports could affect recent revenue gains made in its beef segment. On Monday, Tyson Chief Executive Officer Richard Bond said that renewed shipments to Korea helped bolster beef sales in the third fiscal quarter, helping the Springdale company realize its largest quarterly profit in two years. “We’re extremely disappointed by South Korea’s decision to suspend beef imports,” Tyson spokesman Gary Mickelson wrote in an e-mail Thursday. “We’re hopeful USDA will be able to resolve this matter quickly so we can continue to serve our South Korean customers.”
Mickelson said the import suspension could force Tyson to scale back production at plants that make beef for South Korea. One of its plants will not operate Saturday as scheduled because of the loss of the South Korea business, Mickelson said.
The latest suspension raised concerns about retail beef supplies in South Korea. “There could be problems with supply of the meat if the inspection halt remains in place for a long time,” said Kim Min Suk, a spokesman for Lotte Mart, a South Korean discount store operator which resumed the sale of U. S. beef on July 13.
Speculation that South Korea would ban U. S. beef caused cattle futures to fall the most since June 6 in Chicago on Thursday, with the October contract dropping 1. 15 cents, or 1. 1 percent, to 98. 8 cents a pound. Futures fell an additional 0. 65 cent Thursday. The price is still up 18 percent in the past year on expectations of higher exports.
The United States is trying to normalize beef trade with South Korea, once its third-largest overseas market with sales in 2003 worth $ 815 million, according to data on the U. S. Meat Export Federation Web site. Last year’s total was $ 612, 000.
U. S. Agriculture Secretary Mike Johanns on Wednesday said South Korea has imported about 600, 000 boxes of U. S. beef since lifting a mad-cow disease related ban, and “about six of them weren’t within their protocol.”
South Korea agreed to resume imports of the meat in January 2006, while restricting purchases to boneless cuts from animals aged 30 months or younger. The country argues that the bones may contain the agents that cause madcow disease. Since lifting the ban, South Korea has rejected several shipments of the meat because of the discovery of bone fragments.
Cargill spokesman Mark Klein said the bone in the latest incident was part of a single cut of short loin in a 38-pound box of beef from a plant in Friona, Texas.
Privately owned Cargill, the second-biggest U. S. beef producer, “is currently investigating how that may have happened,” he said in an e-mailed statement. The rest of the meat in the 41, 128-pound shipment will be destroyed or returned, he said.
“Cargill will work with the U. S. Department of Agriculture and South Korean officials as they conduct their own investigations,” Klein said. The company is based in Wayzata, Minn.
Two Cargill plants and four owned by Tyson Foods Inc., the largest U. S. beef packer, were suspended from exporting beef to South Korea in late May. The beef was intended for U. S. consumption and was mistakenly sent to South Korea by a distributor independent of the two companies. The suspension was lifted in late June.
Shares of Tyson Foods fell 7 cents or 0. 34 percent to close at $ 20. 79 Thursday in trading on the New York Stock Exchange. Shares have traded as low as $ 13. 05 and as high as $ 24. 32 over the past year. Information for this article was contributed by David Irvin of the Arkansas Democrat-Gazette.
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