The United States, Canada and the European Union have traditionally been the kings of the pork export world. But a new challenger to the throne is emerging in South America.

In 2003, Brazil was No. 4 in pork exports, despite foot-and-mouth disease limiting its export opportunities.

“Brazil’s biggest challenge to exporting pork is its recurring problems with FMD,” says Lynn Heinze, vice president, U.S. Meat Export Federation. “It has blocked many markets for Brazil.”

China is the only country currently importing pork from Brazil. That could change though, as under World Trade Organization rules, Brazil can regionalize its pork exports. That means only exports from a certain part of the country where FMD is present can be excluded. Some parts of northern Brazil have FMD, as does Paraguay on its southern border. Brazil’s large pork producing areas are not affected by incidence of the disease, says Ron Plain, University of Missouri agricultural economist.

Russia is usually Brazil’s biggest export market, since Brazil’s strength is providing a low-cost product. However, Russia banned Brazilian meat imports in September due to safety concerns, and despite much negotiation the ban is still in place. In the first eight months of 2004 Russia imported 199,000 tons of Brazilian pork. The Brazilian product also appears to have a longer shelf-life than U.S. or Canadian pork, which comes in handy on long export trips.

While Brazil is becoming a player in the pork export market, there’s reason to believe we’ve only seen the beginnings. “Brazil’s biggest advantage is cheap labor cost on the farm and in packing plants,” says Heinze.

There’s also an abundance of feedgrains and arable land — both necessary for pork production.  Brazil continues to produce record soybean crops annually, and has sufficient corn supplies to keep feed affordable.

“Low feed and labor costs make Brazil’s production cost about $10 to $12 per animal lower than in the United States,” says Dermot Hayes, Iowa State University agricultural economist.

All of these factors have attracted investors from across the world. That means new operations being built are modern pork production and processing plants using U.S. genetics and U.S. or European technologies.

“Brazil is the fastest growing pork producing nation,” says Plain. “The Brazilian packing industry continues expanding, with separate, modern plants that service export markets.”

Still, a few drawbacks remain. The infrastructure is very poor, making transportation of both hogs and pork a big challenge. Interest costs are very high, and the value of the country’s currency is falling. Still, most believe that the long-term outlook for Brazilian pork production and exports continues to be bright.

“Brazil has become the world’s No.1 meat exporter since the United States encountered bovine spongiform encephalopathy. Pork exports from Brazil have been growing much faster than pork exports from the United States,” says Plain. “Within the next five years it’s quite possible that Brazil could export more pork than the United States or Canada.”

Heinze points out that there’s been a real commitment from the meat industry in Brazil to become a major exporter. “Brazil will be a force to be reckoned with if it can deal with its disease problems.”

While in the minority, Hayes finds reasons to believe that Brazil will not be a great pork exporter. “Brazil has high interest and capital costs. Its currency is falling, and it’s not a stable economy or political environment,” says Hayes. “If Brazil’s economy turns around, then the people will have more money and be able to eat more meat domestically, leaving less for exports.”

What happens with Brazilian pork exports remains to unfold. Its FMD issue has given the United States and other countries a huge advantage. There’s no reason the United States can’t compete with Brazil, even if it clears up its FMD problems. But it is important that U.S. pork industry capitalizes on the lead it’s already staked out.

“We need to maintain our advantage by making sure our biosecurity measures are in place,” says Heinze. “The United States currently has no diseases that could limit pork exports, but we all saw how much damage one animal did with the BSE case.”