Cattle outbreak hitting Paraguay beef exports

ASUNCION, Paraguay, Feb. 2 (UPI) -- Outbreaks of foot-and-mouth disease have hit Paraguay hard, forcing a drop in beef exports that may top 30 percent this year, latest trade data indicated.

Paraguay declared a partial emergency after the outbreaks began last year. It launched extensive cattle vaccination campaigns and organized relief handouts for affected communities but the problem persists, the reports said.

Latin American beef exports are seeing a major downturn not only because of the disease outbreak but also because of declining output and rising domestic demand in some countries, international competition and currency fluctuations.

Argentine and Brazil exports were also hit because of changes unrelated to the Paraguayan outbreak. However, the disease prompted most of Paraguay's neighbors to halt or limit beef imports from the country.

Paraguay has admitted two separate outbreaks of the foot-and-mouth disease, the second occurrence blamed by critics on the failure of health officials to eliminate remnants of the first. Thousands of cattle were destroyed during the last quarter of 2011, government data indicated.

The Center for the Analysis of the Paraguayan Economy said the outbreaks had cost Paraguay several markets where competitor countries could be moving in. CADEP cited an anticipated 30 percent drop in exports in its latest estimates based on the current outlook for livestock health and beef processing.

Paraguay's beef sales this year could be about $500 million, a major drop from $725 million last year. Officials said they were particularly worried over the next steps by Chile, one of the main clients that stopped buying all Paraguayan beef, including meat produced outside affected zones.

CADEP said Paraguay's export outlook could get worse unless Chile resumed imports from Paraguay.

The response from Russia, another major customer for Paraguayan beef, has been more lenient.

However, officials said much hinged on Paraguay being granted an all-clear by the U.N. Food and Agriculture Organization. That certification is unlikely before late 2012.

Beef exports to neighboring countries, including Venezuela, have suffered in varying degrees, partly due to local economic conditions. Venezuela is in the third year of a chronic recession blamed by the government on weather vagaries, including drought in 2010.

Paraguay exported 141,000 tons of beef in 2011 and 170,000 tons in 2010.

Meanwhile, Brazilian beef exports declined 14 percent in 2011, but the Middle East remained its largest market with Iran, Egypt, Saudi Arabia and Israel as main customers. Brazilian beef production is set to grow in 2012 but exports may not catch up on losses last year because of rising domestic consumption.