The world supply of beef is tight, but China’s appetite for the meat is growing fast and that’s a boon for U.S. producers and exporters.
The U.S. exported about $151 million worth of beef to China in July, breaking a record for the month, according to the latest trade data compiled by the U.S. Meat Export Federation. But that’s only a small part of the picture. U.S. exporters shipped $773 million worth of beef to China in the first seven months of this year, and that’s roughly 1,000% more than the same time frame in 2020.
“Demand for U.S. beef is on the rise,” says USMEF spokesman Joe Schuele. “Our biggest concern is really finding sufficient supply.”
China’s demand for beef has made a meteoric rise in the past several years, and the country is going to continue to consume more — and pay more — for high-value, grain-fed cuts that the U.S. specializes in says Brett Stuart, co-founder of the Global AgriTrends consulting company.
It wasn’t that long ago that if you ate beef in China, it was most likely in the form of frozen rolls plopped into boiling water. Chinese restaurants still serve hot pots, but steaks served Korean, Japanese or even American style have become the trend, says Stuart.
“You walk down through the malls in Beijing or Shanghai and every restaurant has pictures of red, white-marbled beef,” said Stuart. “It’s beautiful grain-fed, prime-plus beef ... It is the thing in China. It is the consummate luxury item, and it’s everywhere and everybody wants a piece of it.”
And more and more Chinese consumers are willing to pay for it. The average market price of beef in China during August was the equivalent of $6.23 per pound, up 3% from a year ago, according to Stuart, who is predicting that Chinese imports will continue to surge in 2022.
China wasn’t importing much beef at all in 2012, but by 2015 the country was buying 500,000 metric tons per year from all of its foreign suppliers. In 2018, China imported 1 million tons, says Stuart, but by 2020 that had doubled to 2 million tons, or roughly $10 billion worth of beef.
Stuart says he expects China will import about 2.2 million tons of beef this year, and a growing percentage of that will be from the U.S.
“Demand is rising and it’s very durable,” he said.
All of the recent success in trade has made the U.S. the “primary supplier of grain-fed beef to China,” according to USMEF, which notes that U.S. beef now accounts for 5% of all Chinese imports.
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A key reason the U.S. can fill that demand is the Economic and Trade Agreement between the Government of the United States of America and the Government of the People’s Republic of China, also known commonly as the “phase one” agreement.
China lifted a 13-year ban on U.S. beef in 2017, but it took the “phase one” trade pact and the resolution of a trade dispute between the two countries to really accelerate Chinese imports. The Chinese agreed in the pact to lift their zero-tolerance policy on growth hormones, eliminate a prohibition on beef from cattle over 30 months old at slaughter, accept the U.S. traceability system, and make it much easier for U.S. packers to be approved for trade with the country. It was not long after “phase one” was signed that the USDA announced that nearly a thousand U.S. beef and pork plants were eligible to export to China.
“What we’ve done with beef with China has far exceeded my expectations,” says Gregg Doud, the Trump administration's chief agriculture negotiator at the Office of the U.S. Trade Representative.
China and the U.S. agreed in the pact to continue negotiating China’s zero-tolerance policy for the growth promotant ractopamine. That’s less and less of an issue, but China’s policy does set it apart from other major importers like Japan, South Korea and Mexico.
“The U.S. industry has responded very well to having expanded access to China, but it’s still a challenge to find supply when our other Asian markets are doing quite well too,” said USMEF’s Schuele.
Other challenges include shipping delays at California ports and a shortage of container cargoes to get U.S. ag products to China as well as labor shortages at U.S. processing facilities, says Stuart.
But U.S. beef exports to China and worldwide continue strong.
Total U.S. beef exports set a July record this year at about $939 million, which was a 45% increase over July of 2020, according to a recent USMEF analysis.
“Beef exports were really outstanding in July, especially with COVID-related challenges still impacting global foodservice as well as persistent obstacles in shipping and logistics,” USMEF President and CEO Dan Halstrom said in a statement. “Retail demand continues to be tremendous, as evidenced by the new beef value record.”
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