CHINA – More US beef companies are selling their product to China to meet increasing demand.
In November, three Iowa companies began selling beef to China, following Nebraska, which is supplying more than half of the US’s beef exports to China, according the US Department of Agriculture (USDA). Nebraska’s share of US beef exports has risen over the past decade from less than 4 per cent in 2005 to more than 18 per cent in 2016, according to the USDA. About a dozen Nebraska-based companies sell beef to China, in addition to 24 companies in 10 other states.
Greater Omaha Packing of Nebraska, reopened the market this summer, which came after China lifted the beef ban last September and President Donald Trump negotiated a 16 July deadline to start shipping again. The Iowa companies are Thunder Ridge Beef Co, Pacific Processors and Quality Refrigerated Services.
Demand for beef in China has skyrocketed to a $2.6 billion industry and has grown ten-fold in the last five to six years, the US Meat Export Federation (USMEF) told Xinhua. In 2014, the US exported about 14 per cent or $7.135 billion worth of its beef production, according to the USMEF.
But initial US beef export volumes will likely be small because of China’s unique import requirements, said USMEF representative Joe Schuele. US cattle must be traceable to their birth farm (or, if initially imported into the US, to their first place of residence or port of entry), less than 30 months old, and free of chemicals and growth hormones.
“Meeting those is a challenge,” Mr Schuele said. “The companies that were best equipped to meet them were ones already exporting to Europe where the requirements are similar.”
Some US plants also don’t have export verification programs, which would allow them to export beef even if they do meet the requirements, he said.
Prior to losing market share in 2003 due to a mad cow disease scare, the US was China’s top foreign supplier of beef, but this wasn’t much overall.
“China wasn’t importing a lot of beef from anyone at that time,” Mr Schuele said. “$50 to 60 million worth [of beef] made us China’s largest supplier.”
Production began increasing in 2005 as herd rebuilding began, but it was interrupted in 2006 and continued to stall through 2011 because of widespread drought conditions and sharply higher feed costs, according to the USDA. Now the US must compete with Australia, Argentina, and Brazil, which have a head start.
The US selling into the Chinese beef market is still in development stages, said Mr Schuele.
“It will take time to get a foothold for US beef in China which is not terribly unusual,” he said. “It took a long time to build Japan into an almost $2 billion market this year. It took a long time to build Korea into a billion-dollar market. Hong Kong and Taiwan took a long time to build. That will be the case with China as well.”