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U.S. beef to China – still a simmering prospect

Progressive Cattleman Editor David Cooper Published on 24 April 2017

Following the news about U.S.-Chinese trade talks is a lot like ordering Chinese food – just when you got enough, you’re seemingly hungry for more.

We seem to be savoring for updates on restoring U.S.-to-China beef exports even when there’s little being served. Take the recent tattle from Chinese President Xi Jinping’s official visit to President Trump’s Mar-a-Lago resort in Florida in April.

News agencies reported that over a New York strip steak dinner, the two agreed on reopening trade for U.S. beef into China.

Good news, certainly. But the problem is similar news came from China and the Obama administration last September with no real results. And in reality, the Mar-a-Lago beef agreement was hardly official news. No announcement came from the administration, and trade groups aren’t even commenting on it.

Even Kent Bacus, NCBA’s director of international trade, tempered the recent discussions with some reality as far as what it will take to get U.S. beef officially into the Chinese mainland.

“Even though there’s been a nominal lifting of the ban from China, we’re still unable to send beef into the Chinese market because we still face some technical barriers to trade,” Bacus said in an April 11, NCBA podcast.

“Over the next 100 days, U.S. and Chinese leaders are going to identify a path forward. We’re going to address some of the technical barriers to trade, like traceability. So we still have a little bit of time before we’re going to see beef enter the Chinese market.”

The key question here is why should we all care? What magic does the Chinese market potentially hold for U.S. beef? And how will it help the U.S. beef producer?

In 2003, China was not a major importer of beef – only about $65 million worth, with $50 million from the U.S, according to the U.S. Meat Export Federation (USMEF). Then with the BSE crisis, we were shut out.

Starting in 2010, the Chinese middle class expanded and demand skyrocketed. Beef imports went to $100 million in 2010, then to a staggering $2.6 billion in 2016, largely from Brazil, Australia and New Zealand.

“It’s taken on a greater urgency because we’re missing out on a major market,” said Joe Schuele, USMEF vice president of communication. The prospective portion of U.S. beef, he added, wouldn’t try to displace all competition, but rather carve a market in the high-end retail, as was seen with other Asian markets.

“Just by the sheer size of the Chinese market, a low percent of Chinese will ever eat at high-end restaurants. But that’s still a significant number of consumers.”

More markets means more demand, and that pushes a price for the calves coming from the U.S. It sounds like wisdom from a simple fortune cookie – but for U.S. ranchers, it should be much more filling.  end mark

David Cooper
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