Brazil has suspended beef exports to China following the discovery of two separate cases of 'atypical' Bovine Spongy Encephalopathy (BSE) or mad cow disease in the country.

Brazil's Ministry of Agriculture, Livestock, confirmed the two cases of the disease in abattoirs in Brazil in two separate states of the country,  Minas Gerais and Mato Grosso.

The discovery of mad cow disease is a blow to Brazil and will restrict beef movements around the world.

"It will make the supply of beef around the world very tight as we come into the strongest period of demand for the year globally," meat industry analyst Simon Quilty said.

It means the world’s biggest beef exporter won’t be selling beef to the world’s biggest beef buyer, China.

According to Mr Quilty, Brazil exports an average of 71,000 tonnes of beef to China each month and the market is expecting exports to be suspended for at least two weeks.

Not the first time

BSE has been discovered in Brazil before.

The last case in 2019 resulted in the ban on exports to China lasting for around 10 days.

However, after the discovery of a case in Ireland in 2020,  that country has not been able to resume exports since.

Atypical BSE, especially in older cattle, is considered a lower risk than the classical form of the disease and naturally occurring.

Like Australia, Brazil is considered an area of negligible risk to BSE.

Trade tensions

While the detection of BSE temporarily leaves a major hole in China's meat supply, concerns remain that ongoing tensions between Canberra and Beijing could prevent Australian producers taking advantage of the suspension.

Former Meat and Livestock Australia chairman and North Queensland grazier Don Heatley said the troubles meant local producers were not guaranteed better market access to China and Hong Kong.

"Under normal circumstances, if an issue like this arose, you'd expect that there would be a flow-on effect to Australia's benefit," he said.

"I'd be a little uncertain about trying to forecast exactly how the Chinese [government] would react to the situation and one of the key issues is how long will this ban on exports from Brazil stay in place?"

Australian product was seen as safer

In 2012 an atypical BSE detection in a Californian dairy cow led to Japan's suspension of US beef imports for four years, during which Australian exports to Japan and South Korea prospered.

During the same period, Brazil was also locked out of the Japanese market, with importers turning to safer Australian product.

"It had an amazing effect, Australia picked up serious volumes of trade and we had a really good opportunity in the period and product was flowing easily from Australia," Mr Heatley said.

While Australia did not maintain all its increased market share once US and Brazilian beef re-entered Japan, the issue highlighted Australia's high biosecurity standards and enhanced the nation's reputation as a reliable supplier of safe product.

With a consignment of Brazilian cattle en-route to Vietnam presently, Mr Heatley said that already marginal export proposition could be threatened.

"When you find BSE in livestock in Brazil, you'd expect that would have a detrimental effect and the South East Asian trade would be very nervous about that," he said.