Could Saudi Arabia lift US beef ban next month?

11-Mar-2014 - Last updated on 11-Mar-2014 at 09:40 GMT

Amid rumours that Saudi Arabia’s ban on the import of US beef could be lifted in April, small American beef producers say they have already ceded valuable ground to countries like Australia and Canada.

One such beneficiary is Pat McCarthy, president at Canadian beef producer Wagyu Canada Inc., who told FoodNavigator that the Middle East market for his high quality marbled beef has grown exponentially over the last few years and was given a further fillip when Saudi Arabia banned the import of US beef in 2012.

“It gave us an opportunity to increase our presence in that marketplace. Naturally, when you have less competition, it gives you an advantage,” said McCarthy, who has been exporting high-value cuts such as rib-eye, tenderloin and briskets to the country.

American beef exporters are painfully aware of this advantage.

Demand for meat in Saudi Arabia increased dramatically during the last two decades, which has forced the government to import beef and lamb even as it tries to achieve increased self-sufficiency in meat commodities.

In 2012, the Saudi Food & Drug Authority issued a temporary ban on beef imported to Saudi Arabia from the US, preventing the import of all beef products due to a confirmed case of BSE (bovine spongiform encephalopathy).

That temporary ban was expected to be lifted quickly, but has now been in place for almost two years, which is hurting American beef players, especially the smaller players who were strongly profiting from the market prior to the ban.

In their place are players from countries like Canada and Australia, the latter having seen its beef exports to Saudi Arabia for 2013 total 31,126 tonnes, up almost six-fold on its 2012 shipments.

“We were well positioned when the ban on US beef happened to take up the space it occupied. It was a great opportunity for us,” said Jamie Ferguson, regional manager for Middle East and North Africa at Meat and Livestock Australia.

View from the US

Mike Shenson, president of Lincoln International, a US-based producer and exporter of red meat products, told FoodNavigator that Saudi Arabia was the strongest market for American beef till it was shut down.

“While it has helped us focus on other markets, we are losing the market to countries like Canada, New Zealand and Australia. Competing countries come in and take advantage of the market you have built,” Shenson said.

Jerry Wiggs heads export beef sales at Greater Omaha Packing Co., a US independent slaughterhouse that processes 2,400 head of cattle each week at its single plant in Nebraska, from where its packaged beef products are shipped to some 50 international markets.

“For Greater Omaha’s plant in Nebraska, Saudi Arabia was a very, very important market,” he said. “Before the ban, we were shipping one to one-and-a-half containers a month to the country and I have had many conversations where they are still asking for our beef.”

“As good as the other markets are, we would really like to get back to Saudi Arabia. If we can get Saudi Arabia to agree to let US beef back in the market, it would be a huge boost for American beef makers. We are losing our market to other countries,” he said.

However, Wiggs is confident that once the green light is given again, it would not be long before American beef producers steadily take the market back.

When can we expect the green light?

Representatives from the US Meat Export Federation and Beef USA have remain tight-lipped but optimistic about the ban being revoked, but Wiggs said that he had been told that negotiations have been reopened recently.

A source close to the developments, told FoodNavigator on condition of anonymity that the Saudi Food and Drug Authority have nominated two senior officials to negotiate on their behalf with US authorities.

“They have informed US authorities of new scientific criteria for the import of US beef into Saudi Arabia. The ban therefore, hopefully, will be lifted in April,” the official said.

However, Kassem Atoui, managing director for United Supply Food Services, a distributor for Lincoln International’s range of products, said the ban had little to do with science and safety.

Referring to the Syrian crisis and the opposite views of Saudi Arabia and the US, Atoui said: “It is all politics.”