Thirteen years ago, China banned U.S. beef imports. The move followed confirmation of a case of Bovine Spongiform Encephalopathy (BSE) in a dairy cow in Washington State. Since that time, the Chinese market with its burgeoning middle class, has been on the wish list of U.S. beef producers. News the ban is finally lifting couldn't have come at a better time, as prices have begun to trend down under pressure from herd expansion.
As usual, the devil is going to be in the details when it comes to when and how this market will open. Some early reports predicting U.S. beef will hit Chinese shores this year may be overly optimistic.
News the ban is about to be lifted followed a speech by China's Premier Li Keqiang this week in New York. He is quoted as saying his country would allow beef imports from the U.S. "soon." The distance between soon and an actual sale, will depend on USDA officials who are working with China's Administration of Quality Supervision, Inspection and Quarantine to approve certificates and protocols needed to export beef to the country.
However long it takes to work though the specifics, Tracy Brunner says this is extremely positive news.
"These are exciting times in the beef industry. We are in an expansion phase, and never before have we needed access to growing global markets as much as we do now," said the fourth-generation Kansas cattle producer in an interview with DTN. His family manages a diversified beef operation, including seed stock and commercial cattle; as well as a finishing yard.
Brunner, current president for the National Cattlemen's Beef Association (NCBA), added it is absolutely too early to know what impact this move might have on beef prices or export numbers. But, he said, it is "very, very important" given that some 300 million Chinese have achieved middle-class status and are rapidly improving their standard of living.
"The first priority when people have more purchasing power, is to improve the quality of their diets. That means more protein, more high-quality protein. And that means U.S. beef, which is the gold standard," he said.
It would be hard to overstate the significance of a Chinese market for U.S. beef. Some analysts have estimated being out of this market costs producers as much as $100 per head. For 2014, beef imports to the country topped 317,119 metric tons, at an estimated value of $1.35 billion. By far, the largest seller of beef to China is Australia, with about 40% of the market. That country has seen herd numbers plummet to a 20-year low recently, due to increased demand and drought.
U.S. beef producers will have to supply product that can meet China's eligibility requirements. Three major points are being discussed as possibly key to that, including that the beef come from animals less than 30 months of age, that it meet traceability conditions and that it be ractopamine free.
Brunner said all of these points, should they be part of the final agreement, are attainable by the U.S. beef industry.
"The vast majority of animals harvested here in the U.S. are 30 months of age and younger. So we fit that criteria easily," he said. With regard to traceability and ractopamine-free product, Brunner added he believes those points are achievable through voluntary means within the industry.
"China has long presented our negotiating teams with wish lists they had for products coming into their country, and it remains to be seen what their top priorities are at this time. We will find that out as the process moves forward. The bottom line is our industry is ready, willing and able to meet any and all of those qualifications through voluntary programs," he said.
Victoria Myers can be reached at email@example.com
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