China lifts ban on U.S. beef
September 26, 2016
After thirteen long years, China has announced it will once again open its doors to U.S. beef. China banned American beef following the first case of BSE in the U.S., and although there are some critical steps that need to be accomplished before U.S. beef actually hits the Chinese marketplace, it's positive news for U.S. beef producers.
"We're very pleased that this step has been taken by China," said Barry Carpenter, North Amer-ican Meat Institute president and CEO. "Although the Chinese market wasn't a huge market be-fore the ban, we see the potential for this to be a very large market going forward. The biggest way we can grow our beef demand is through export markets, and we believe this is going to be a big deal for our producers."
"We have to look at what it's taken to get here," added Kent Bacus, director of international trade for the National Cattlemen's Beef Association. "We've made China a top priority in the last few years because we realize the value of what China could mean to our beef producers. The U.S. and China meet a couple of times each year to discuss economics, defense and other issues, but beef has been a part of the discussions, as well. Through these meetings, we've tried to explain to the Chinese government our production practices and how our beef gets from pasture to plate."
Bacus said these discussions have allowed a trusting relationship to form, which allowed China to feel comfortable in lifting the ban.
"It took 13 years to get that accomplished, but we are hopeful that the technical discussions won't take very long, and we can get beef on the shelves in China," said Bacus. "Looking at other countries who have regained access to China, such as Brazil and Canada, it was a matter of months, so we are optimistic, but realistic, too, that there are a few things to accomplish first before beef is officially available for the Chinese consumer."
Now that the Chinese government has indicated its intentions to accept U.S. beef from animals under 30 months of age, the next step is for the USDA to work with China's Administration of Quality Supervision, Inspection and Quarantine officials to determine the specific protocols and approve certificates needed for exports to resume.
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"The U.S. Meat Export Federation has done some projections on how big this market could possibly be, and it's hard to tell at this point," said Carpenter. "However, given the wealth that has been created in China over the last 10 years, there are a lot of opportunities to sell USDA Prime and Choice beef for steakhouses."
China is the world's second largest buyer of beef, and the nation's growing middle class is seeking higher-quality protein sources to feed their families. This presents an exciting market opportunity for U.S. beef producers.
"The size of the purchases from China will depend largely on negotiations, but when we look at the opportunities for selling beef cuts, it's going to be a great market for round, short ribs, tongue and other offal products. Once we get into the Chinese marketplace, we'll be able to promote high-quality U.S. beef, and the demand will only grow larger. Every country that has done business in China has seen tremendous growth, and I don't see that being any different for the U.S. We produce one of the highest-quality products in the world at such a tremendous volume, so there will be a lot of room for us to compete in the marketplace. This is all good news for U.S. cattlemen."
The Wall Street Journal reported on a press conference where Chinese Premier Li Keqiang spoke to U.S. businesses, saying, "We also recognize that the United States has very good beef, so why should we deny Chinese customers this choice?"
Although the timeline, protocols or size of purchases are unknown, currently, China requires beef imports to be free of hormone growth promotants. Negotiations still need to take place to determine the specific requirements U.S. beef will need to meet before hitting the shelves.
Looking beyond China at the potential of additional export markets, Carpenter and Bacus say the passage of the Trans Pacific Partnership will allow for open trade and the potential to expand export opportunities.
"We continue to see that value of exports and trade overall in the beef industry, and it's not just China we are looking at," Bacus said. "It's the entire Pacific Rim, which is home to 40 percent of the global GDP. We can only take advantage of these opportunities if we pass the Trans Pacific Partnership (TPP). We must enact the TPP in order to have the greatest access to the fastest economic region in the world. I urge cattlemen to engage with their members of Congress and Senators and tell them we need a 'yes' vote on TPP this fall."
"We strongly endorse the TPP; we believe in a free market economy," added Carpenter. "It's critical we pass the TPP, more in the beef industry than in any other sector. F