US beef producers facing challenges in return to Chinese market
- Reigniting sales in China is proving difficult for U.S. beef producers since the market reopened earlier this summer, Bloomberg reported. When U.S. beef was shut out of China in 2003 soon after its first case of mad cow disease was found in Washington state, other countries quickly stepped in to fill the void.
- Steep competition, coupled with strict beef import restrictions in China, means the amount of American supplies entering the country is limited and has gone mostly unnoticed by Chinese customers, according to the wire service.
- “The U.S. produces beef differently from other countries like Australia and Brazil, which do not use some feed additives that are banned by the Chinese government,” Chenjun Pan, an analyst at Rabobank International, told Bloomberg. “Trade will grow gradually, but I don't think it will increase to the extent that would affect China's beef market, because of its limited supply.”
After 14 years, China has reopened its doors to U.S. beef exports. But it seems as if Chinese consumers are not necessarily excited to buy U.S. beef. As reported by Bloomberg, American beef is trickling into stores, but a Sam’s Club shopper remarked that the U.S. meat was “only available in little strips meant to be stir-fried rather than in larger hunks that can be sizzled on a cast-iron skillet.” This is in stark contrast to some cuts available from other countries like Australia, which provides marbled rib-eye steaks and fatty oxtail chunks.
These difficulties shouldn’t come as a surprise to beef producers that have an understanding of Chinese consumer tastes and have been watching what happened in the world's most populous country since the U.S. ban started in 2003. Still, it appears the inroads made by foreign competitors likely will impede U.S. beef's re-entry into China for some time to come.
There could be some political undertones at play in the U.S.-China beef relations, too.
“Beef is a big deal in China, and I'm convinced that when the Chinese people get a taste of U.S. beef, they're going to want more of it,” Agriculture Secretary Sonny Perdue was quoted in a U.S. Agriculture Department press release while promoting the bilateral deal in Beijing. Meanwhile, President Trump was busy touting the open trade relations on social media.
It’s a case of easier said than done, however, because of strict beef export specifications set by China’s government. In addition to age and source verification, China also generally demands hormone-free and/or GMO-free beef. Many U.S. beef producers aren’t operationally set up to meet some of these stiff requirements, especially ones related to feed additive bans.
For instance, “out of 600,000 head of cattle slaughtered in the U.S. each week, only about 1,600 can meet Chinese specifications,” a manager at the fresh produce department of Womai.com, the online retail platform of China's state-owned Cofco Corp. told Bloomberg. With the odds stacked against U.S. beef producers, it is little wonder American cuts are going unnoticed by Chinese consumers.
Some changes will be required before U.S. beef shows up in any meaningful quantity in China. A push toward more grassfed and GMO-free beef may be the answer. Interest in the idea is growing, with two of the biggest U.S. beef packers — JBS and Cargill — now offering grass-fed beef. It could succeed in China where consumers are more accustomed to paying for premium meat cuts.
- Bloomberg US beef struggles in China
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