Day 068 - 16 Dec 94 - Page 16

     
     1        A.  If I may clarify, that is frozen beef.  Maybe so you
     2        can understand the difference:  in the US, there is a lot
     3        of fresh beef available for the local market.  In Uruguay,
     4        there is three times more cattle than there is people.
     5        They have to depend on the world export for their survival
     6        of their beef industry.  The only way they can export beef
     7        from Uruguay to Europe or Asia, which is primarily the only
     8        place which they can export, they cannot export into the
     9        US, they cannot export into most of Latin America,
    10        including Mexico, because they are classified as a hoof and
    11        mouth disease country; that would prevent them from moving
    12        product around the world; there is lot of sanitary
    13        requirements.  They can only export frozen beef.  So it is
    14        different; that time frame does not apply for fresh beef.
    15        It will not last into Malaysia.
    16
    17        In the US, our facilities are not set up for handling
    18        frozen product.  We do not have freezers that will keep
    19        that product.  We do not have the equipment required to
    20        make patties, frozen patties.  If you run frozen meat into
         our grinders, it will take less than a minute to destroy
    22        them.  We could not do that.  You have to have special
    23        equipment, which we do not have in the US.  It would cost a
    24        lot of money to do it.  There is not a need.  Freezing the
    25        product adds cost to it, because you have to freeze it and
    26        you have to package, a lot of package, small containers.
    27        So there is not an incentive for us to use it.
    28
    29   MR. JUSTICE BELL:  Do you want to have the five-minute break
    30        now?
    31
    32   MR. MORRIS:  I would like to keep going today as much as
    33        possible to get as much out of the way as we can.
    34
    35                       (Short Adjournment)
    36
    37   MR. MORRIS:  I am just trying to identify what kind of beef.
    38        The use of frozen beef is used outside the USA and
    39        transported around?
    40        A.  That is correct, yes.  I have never seen our suppliers
         using frozen meat, nor have I seen their equipment required
    42        to use it.
    43
    44   MR. JUSTICE BELL:  Can I just ask a question there:  is there
    45        anywhere outside the Continental US that beef could come
    46        from, remaining in good condition, without being frozen?
    47        A.  It could -- the only place that I can think of is
    48        Mexico.  Before NAFTA, you could not import beef from
    49        Mexico, frozen beef or fresh beef, because there were
    50        political barriers.  With NAFTA, now you can. 
    51 
    52        Fresh beef from Costa Rica or Central America will not, 
    53        under fresh conditions, will not last.  It normally takes
    54        10 days now, with better improved logistic systems that
    55        were brought up by NAFTA, too.  Before that time it took
    56        longer.  Beef will not last 10 days under fresh
    57        conditions.
    58
    59        May I add just, I guess to clarify, NAFTA -- I am sure
    60        everybody is aware of it -- is the North American Free