Nebraska beef producers earned bragging rights this week, with the first shipment of U.S. produced beef to be exported to China in 14 years, thanks to a recently negotiated trade deal.
The occasion was commemorated with Neb. Gov. Pete Ricketts and state Department of Agriculture Director Greg Ibach joining Greater Omaha Packing company officials for a ceremonial loading of the first box of beef for air transport.
China originally imposed the ban on U.S. beef exports following a case of mad-cow disease. Ironically, the traceability requirement called for under the new agreement could also bodes well for Michigan beef producers, according to Michigan Farm Bureau Livestock Specialist Ernie Birchmeier.
“The traceability requirements were an absolute with Chinese negotiators in getting this new agreement with approved,” Birchmeier said. “Because of the state-level mandate requiring all Michigan livestock producers to use Radio Frequency Identification or “RFID” ear tags as part of the state’s TB-surveillance program, Michigan beef producers are ahead of the game.”
According to Birchmeier, highlights of the final protocols for shipping U.S. beef to China include:
Beef and beef products must be derived from cattle that were born, raised, and slaughtered in the U.S., cattle that were imported from Canada or Mexico and subsequently raised and slaughtered in the U.S., or cattle that were imported from Canada or Mexico for direct slaughter;
Cattle must be traceable to the U.S. birth farm using a unique identifier, or if imported to the first place of residence or port of entry;
Beef and beef products must be derived from cattle less than 30 months of age;
China also bans the use of growth promotants, feed additives, and chemical compounds; and will conduct residue testing at port of entry on shipments of beef.
With a population of about 1.4 billion people and over the last five years, Chinese beef consumption has been climbing along with imports, according to Birchmeier.
Up until 2011 beef imports to China struggled to reach more than 50,000 tons, but in 2012 imports doubled. Over the next four years, imports would increase nine-fold, reaching 601,000 tons in 2016.
Since U.S. market access was eliminated, Australia took the lion’s share of the business in this growing market, followed by Uruguay. Figure 1 shows the historic rise in beef imports over the last 20 years.
(Click on chart to enlarge)
According to American Farm Bureau Federation (AFBF) economist, Katelyn McCullock, the new agreement will give U.S. agriculture access to one of the fastest growing beef markets in the world. She says China has developed a strong appetite for beef, creating tremendous market potential for American agriculture.
“Since 2003, the last time the U.S. was in that market, we’ve seen imports of beef rise in China from about $70 million, to over $2.5 billion worth of beef imported last year to China,” McCullock said. “The market potential is such that this could be a very big deal for US beef producers.
McCullock says the market has changed since the U.S. last exported beef to China, and that may provide a higher export value potential for U.S. farmers.
“They used to import a lot more variety meats and we’ve really seen that change over to much heavier demand in muscle meats,” said McCullock. “Muscle meats tend to be of higher value, and so there’s potential there to have not just more exports, but also higher-valued exports.”