By now, you’ve probably heard about Brazil’s ballooning meat crisis. Brazilian Federal Police on Friday launched “Operation Flesh is Weak,” a series of raids spanning six states and probing 21 or more major meat processors— including JBS SA, the world’s largest meat processor, and BRF SA, Brazil’s largest exporter of poultry, pork, and processed food. Investigators allege the companies bribed federal inspectors to overlook unsanitary conditions at plants, and used chemicals and additives to conceal low-quality, expired meats.
Brazil’s meat export industry may have been the only one to experience growth during the country’s worst-ever recession, which has been squeezing the national economy for at least three years. Total meat exports reached nearly $13 billion in 2016. But the fallout from the scandal has been equally robust: Three plants have been closed, and China, Chile, the European Union, Hong Kong, and Japan have temporarily banned or restricted imports. A spokesperson from the United States Department of Agriculture (USDA) told Reuters the agency is testing all shipments of Brazilian raw beef and ready-to-eat meat products for pathogens.
The investigation of 21 companies is somewhat relative, considering Brazil is a country with as many as 4,800 processing facilities. But despite the fact that the facilities being investigated represent a tiny fraction of the whole, retailers in some countries have been reactive. Even after South Korea lifted its ban on imports, ABC reported that its supermarkets were pulling Brazilian chicken products from shelves on Tuesday. And the National Farmers Union of Scotland took the opportunity to remind UK residents to “buy Scottish” to ensure quality control.
The scandal’s timing couldn’t be worse for trade relations. Until very recently, the United States was not importing fresh beef from Brazil. But USDA in August of 2016 exchanged food safety equivalency documents with Brazilian authorities, which amounted to an agreement between the two countries that the inspection process on Brazil’s end met USDA standards, and vice versa.
On Monday, the advocacy group Food & Water Watch urged USDA to revoke Brazil’s food safety recognition, adding that “this latest revelation of corruption—bribery, using chemicals to cover up rotten meat, sending salmonella-contaminated meat to Europe and falsifying health certificates—comes after past problems with the country’s equivalent inspections system.”
What kind of an impact does the Brazil crisis have on U.S. meat supply? Perhaps not all that much—at least not yet. It turns out we don’t really import any chicken from Brazil. And we’re not buying that much beef from the country either. Since the equivalency agreement kicked in in November (there was a three-month waiting period between when the documents were signed and imports could begin), an average of about 10 percent of our beef and veal imports have come from Brazil. Canada, New Zealand, and Australia make up the lion’s share of our beef suppliers.
But it’s nearly impossible for the average shopper to determine whether ground beef in the deli case comes from Canada, New Zealand, Brazil, or the U.S. Our laws don’t require meat to be labeled with its country of origin. That hasn’t always been the case: the 2002 Farm Bill required retailers to include Country of Origin Labeling (COOL) on most meat. But after trade partners like Canada and Mexico balked and threatened to impose more than $1 billion in retaliatory tariffs on U.S. food products (and the World Trade Organization signed off), Congress repealed COOL rules for beef and pork. Since the end of 2015, those rules have not been in effect.
While the U.S. has not yet halted imports of Brazilian meat, the COOL repeal means we as consumers can’t necessarily avoid it. So, we lean heavily on our own secondary inspection efforts: In the U.S., all meat and egg imports are inspected again as they enter the country. Food Safety and Inspection Service (FSIS) officials do a visual check, and a computer system selects random shipments for more testing. In cases like this one, where a single exporter has been flagged, officials ramp up testing for shipments from that country.
But according to the FSIS website, USDA employs only 65 people to do all the secondary inspection work at 150 facilities. That means 65 people are inspecting billions of pounds of meat and millions of pounds of eggs as they come into the country each year. Which is why food safety equivalency recognition is so important. We have been relying on Brazil to test for residue, salmonella, and E.coli before meat leaves the country.
We don’t yet know the full scope of the scandal or the breadth of its public health implications. But Brazilian President Michel Temer has already called it an “economic embarrassment.” Shares in JBS and BFS dropped as much as 10 percent on Monday. The Financial Times quoted macroeconomic research company, Capital Economics’ note to its clients, which painted a dire picture: “At face value, the developing scandal over Brazil’s meat exports could plausibly derail the country’s economy recovery.”