OMAHA (DTN) -- U.S. meatpackers are still waiting for final protocols and an official date for restarting beef exports to China, but the U.S. Meat Export Federation's marketer in Asia expects high demand for American beef.
The USMEF held a press call on Wednesday to update reporters on various markets. Most of the discussion revolved around what the expectations are for China. Joel Haggard, senior vice president for the group, said there is "intense buying interest" for U.S. beef as he pointed to the discussion regarding U.S. beef at a trade show last week in China.
Haggard noted there are hundreds of five-star hotels in China that may want ribeyes, but a lot of cuts being sent to China will be price sensitive for consumers there. Right now, however, more information is needed about the kinds of cuts that will allowed for import.
"What range of cuts can a buyer take to China? The more he can take, the better," Haggard said. "I'm confident on the demand side," but starting those exports will be slow and tricky, he said.
Until pricing has been put out to the importers, the extent to which China can incentivize U.S. meatpackers to cater to China will be unknown, Haggard said.
China also has a basic tariff on chilled and frozen beef imports of 12% and all agricultural imports are assessed a 13% value-added tax. The only beef supplier that would have significant advantage is New Zealand because of a free-trade agreement with China. Australia has a slightly lower tariff as well.
The U.S. has been shut out of China since 2003 after the first case of bovine spongiform encephalopathy was found in the U.S. It has been a slog to get beef back into the country, but the U.S. reached an agreement with China earlier this month on a 100-day trade action plan that opened up the market for U.S. beef as early as mid-July.
The effort to return U.S. beef to China and increase ag exports to the country could get a boost now that Terry Branstad is officially the U.S. ambassador to China. Branstad resigned as Iowa's governor and was sworn-in as ambassador on Wednesday.
For now, U.S. meatpackers are waiting for specific requirements from China on issues such as traceability, which has been a critical issue for other competitors in China.
"The devil is in the details about what the protocol language is going to be," Haggard said. "Most countries that supply beef to China, there are these written protocols and they spell out what the supplying country must comply with."
The industry is waiting on specific language about traceability and other specifications. Some details are already known. USDA stated that China wants full traceability on beef going into the country, down to where the cattle were raised. Beef must come from animals under 30 months of age and from graded animals. China also has a law banning beta-agonists in feed such as ractopamine. Beef for export to China will have to pass residue tests at port showing there is no detectable traces from such growth drugs, USDA stated.
"The industry should expect China will test our products when it hits the ports," Haggard said.
Still, Haggard said there will be other specific protocols that exporters and importers will have to follow to get shipments cleared at ports.
"Until we see that, it's difficult to say how the U.S. industry is going to organize itself to produce cattle and beef for China and how popular it will become."
USMEF expects growing demand once the kinks have been worked out of the import requirements. China imported 600,000 tons of beef last year.
Beyond China, USMEF said U.S. beef exports overall are up 15% in volume and a 19% increase in value from a year ago. Volume is up 41% to Japan, 17% to Mexico, 21% to South Korea and 14% to Canada.
"We have now become the No. 1 exporter of beef in the world, and that's quite a milestone," said Phil Seng, president and CEO of USMEF.
The U.S. also sent $30 million in beef to Brazil this past week for the first time in 13 years.
"We are very encouraged we are able to export to Brazil, and hopefully the velocity of those exports will increase as time goes on," Seng said.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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