Want to produce cattle for China? Communication, information key.
October 6, 2017
You've seen the headlines. You've decided you want to produce cattle for the Chinese export market. But what's next? According to Doug Stanton, vice president of sales and customer development with IMI Global, you need to talk to your packer. If you're a cow-calf producer, you need to talk to your feeder.
Stanton spoke on market opportunities at the Feeding Quality Forum August 29 in Omaha, Neb., and August 31 in Garden City, Kan. Not surprisingly, China was one of the biggest of those opportunities.
The fastest-growing beef market in the world, Stanton noted, "China's middle class alone is already as large as the entire U.S. population. When combined with Hong Kong and Vietnam, the region is the largest importer in the world. Fastest growing, too.
Stanton said China's imports broke records in 2016, up 56 percent in a year-long period. While the country's top suppliers are Australia, Uruguay, New Zealand, Argentina and Canada, the U.S. had been out of the market for the last 12 years. That may change since the U.S. Export Verification Program was finalized June 17.
While source verification — from birth to slaughter — is a requirement, age verification is not. However, Stanton said, age verification "is an opportunity" and does allow the carcasses to bypass dentition and physiological checks for age at the packer. He noted electronic identification (EID) tags must be applied to cattle before they leave the ranch they were born on, as China does not allow back verification.
An animal's shipping certificate moves with it throughout the supply chain, and EID tags are allocated in the IMI Global online tag lookup system, Stanton explained. China bans all hormonal growth promotants and tests for synthetic hormones and beta-agonists upon import arrival. That's why many packers are currently utilizing Non-Hormone Treated Cattle (NHTC) and Verified Natural Beef program cattle.
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Think your cattle meet the criteria? Stanton said it pays to make sure.
"If you want to get involved in China, I would be talking to the packer or packers you're marketing product to and see what their requirements are going to be before you make any buying decisions," he said.
"We've had people who are going out and buying cattle that are source-and-age verified, and so they feel like they are in that market and they're ready to go to China. But they have not talked to the packer buyers yet to find out what those requirements will be, or what their expectations are," Stanton noted. "We don't want anyone to get into that kind of situation. My best advice is to talk to the guys you're dealing with and see what they think you ought to do."
Beyond China, Stanton discussed other market opportunities, and they all have one thing in common — documentation. He said if you're doing something to differentiate your cattle from others, you're going to have to keep track of it if you want to get paid.
Responding to a question about the impact of Amazon buying Whole Foods Market with its natural, NHTC and other beef niche products, Stanton said consumer demand is evolving to include more attributes.
"Whether science or not, it's what they want," he said. One way for feedyard operators to "maximize carcass utilization" within the array of brands is to work with IMI Global to "bundle verification programs."
–Certified Angus Beef