Roping the wind—Will China’s beef market really materialize?Roping the wind—Will China’s beef market really materialize?
Last week’s excitement over the possibility that China might reopen to U.S. beef may prove to be a hollow victory, thanks to U.S. beef industry obstinance.
April 19, 2017
Many media outlets, BEEF included, excitedly reported on the meeting last week between President Trump and Chinese leader Xi Jinping, in which beef trade was one of the topics discussed. And make no mistake—the prospect of having direct access to the Chinese market is indeed exciting.
Per-capita beef consumption in China is forecast to be 12.7 pounds in 2017, according to Josh Maples, ag economist at Mississippi State University, writing for the weekly In The Cattle Markets, published by the Livestock Marketing Information Center. Even if beef consumption in China were to increase just 1 ounce per person, the figure would be staggering. Indeed, 1.3 billion times anything is a huge number.
And it’s not that Chinese consumers don’t have access to U.S. beef. It just goes to Hong Kong and Vietnam first. While this “gray trade” has been going on for years, it is very much in the interest of the U.S., and I suspect China as well, to legitimize it.
Question is, will that ever happen?
Answer: It’s up to you.
Let me explain. Last week’s announcement was nothing more than a restatement of the announcement made in September 2016 that China was willing to discuss the possibility of reopening beef trade with the United States. That trade was shut off in December 2003 when the U.S. announced it had discovered its first case of BSE.
Two major hurdles will likely have to be surmounted in the negotiations, and if past experience is any indication, those negotiations will be painfully drawn out. Those hurdles are that China will insist that beef be produced without the use of growth promotants and that strict traceability requirements are in place. It is highly likely that those two requirements will be deal killers in any negotiations that may take place between the U.S. and China.
I’m not going to argue the growth promotants, even though the requirement flies in the face of science. With NHTC programs in place, the infrastructure to meet that requirement is already set up.
So let’s look at animal traceability. For the beef it imports, China requires that each animal has a unique identity, the farm of origin (place of birth) can be traced and the cattle should be slaughtered less than 30 months of age, Maples says.
According to the Daily Livestock Report, Australia, Brazil, Uruguay, New Zealand and Argentina all have mandatory traceability systems for their cattle. Not surprisingly, Maples says that 87% of China’s 2016 beef imports were from Brazil, Uruguay, Australia and New Zealand. In addition, Canada began shipping boneless frozen beef from cattle under 30 months of age to China in 2011 and bone-in frozen beef in 2016.
The current animal ID system in the U.S. is designed to deal with an outbreak of a foreign animal disease. It doesn’t require identification of feeder cattle or of breeding cattle that don’t leave their state of origin. It’s not designed to meet the trade requirements imposed by China or any other country.
The U.S. does not have a nationwide, mandatory birth-to-harvest animal ID system. And until we do, we can consider the Chinese beef market inaccessible for direct trade.
Many of the alliances and programs, like NHTC, already have birth-to-harvest animal ID systems in place. Will China be willing to accept those in lieu of a nationwide, mandatory birth-to-harvest animal ID system? That will certainly be a key point in the negotiations, if they ever happen.
So why is your access to the Chinese beef market up to you? Because there is a very vocal minority of cattle producers in the U.S. who reject the idea of any form of mandatory animal ID.
I respect their right to think like that, but keep this in mind: as long as that philosophy is allowed to set the tone and direction of the discussion surrounding nationwide animal ID in the U.S., we can consider direct access to the Chinese market off limits to U.S. beef.
And since 1.3 billion times anything is a huge number, it’s important that, pro or con, you make your views known.
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