- A new trade deal between the U.S. and China will allow for U.S. companies to sell beef in China, according to Quartz.
- China consumed nearly 11.9 pounds of beef on average per person in 2015. The consumption rate drove the price of beef to "historical highs," according to research company Meat and Livestock Australia. Current beef prices in China are about $4.19 a pound.
- China banned U.S. beef in 2003 after the country’s first case of mad cow disease.
After 14 years, China is reopening its doors to U.S. beef imports. The process started slowly last fall, but this new deal removes most restrictions and will restart trade by July 16.
President Trump's administration made it clear anything that raises the stature for the U.S. and its companies is a plus in his book.
By allowing the U.S. to sell beef in China, producers will be able to capitalize on the nation's $2.5 billion market, according to estimates from Commerce Secretary Wilbur Ross. Chinese consumers view U.S. graded beef as higher quality than the pork products they are used to. Studies show that beef consumption among China’s affluent urban middle class has been steadily rising.
As China's middle class grows, studies have shown disposable income has increased 38% — creating more of a chance to spend on high quality imports.
China isn't the only nation that is getting its first taste of American beef in many years. U.S. beef exports also just resumed to Brazil, which had also had a mad cow disease-related ban since 2003.
And it's a very good time for the U.S. to be exporting to the Brazilian market. That nation's meat titan JBS has been embroiled in corruption scandals for much of the year. On Monday, a Brazilian newspaper published a story in which JBS executives claimed they had recorded conversations of President Michel Temer approving hush money. JBS's stock fell 30% in a single day. While reports say these conversations had more to do with insider trading than food safety, earlier charges indicate JBS executives bribed officials to keep rotten meat on the market. Until investigators get to the bottom of the scandal, Brazilian consumers may not be ready to trust their domestic beef.
With a track record of potential corruption and safety issues with Brazilian beef, China may want to look to other foreign sources for its imports. Last year, Brazil became the top exporter of beef to China — a position the U.S. might be willing to try to move into.