WASHINGTON (Dow Jones)--U.S. Department of Agriculture Secretary Mike Johanns said Tuesday that he "vented frustration" to South Korea over its rejection last week of a U.S. beef shipment.
The nine-ton shipment from Creekstone Farms Premium Beef that was rejected was the first since South Korea lifted its nearly three-year ban on U.S. beef.
Johanns complained that the rejection was the result of the discovery of a small piece of cartilage, something he argued should not have been important.
"You can't trade under these circumstances," Johanns told a gathering of reporters.
South Korea partially lifted its ban on U.S. beef on Sept. 8, but U.S. producers were hesitant to ship because of uncertainty over the country's import restrictions. There remained disagreements between the two countries on what constituted a "specified risk material" - material considered to be risky for the spread of mad-cow disease - and South Korea refused to agree to a tolerance level for bone fragments and cartilage.
USDA officials said earlier this month that negotiators made progress in getting South Korea to agree that bovine material such as silver skin – a membrane separating muscle groups - is not a risk, but there was no success in getting the country to agree to tolerance levels for bone fragments and cartilage.
And it was one "small piece of cartilage" that Johanns said prompted South Korea to reject the entire shipment from Creekstone.
Johanns expressed sympathy for Creekstone. The company, he said was promised an open market, but "the market isn't even close to open."
Creekstone had been hoping its first post-ban beef shipment would be successful and was already planning to send more.
The demand from South Korean importers is strong, Creekstone Senior Vice President of Operations Kevin Pentz said earlier this month while the beef shipment was still being inspected.
South Korea was the second-largest foreign market for U.S. beef until December 2003, when the country - along with most other major markets – banned U.S. beef. The bans came after Dec. 23, 2003, when the USDA announced finding the first case of mad-cow disease, or bovine spongiform encephalopathy, in the U.S.
Source: Bill Tomson, Dow Jones Newswires; 202-646-0088; bill.tomson @dowjones.com