Opening China markets
SOMERS – Three weeks after returning from a U.S. meat export trade mission to China, Dean Black was back to business in Calhoun County on April 25 planting corn in a 130-acre field near Somers.
He was part of a week-long Iowa Trade Mission, meeting with Chinese leaders to officially reopen beef into China.
He said he thinks the borders will be reopened sometime in 2014. The Chinese market has been closed to U.S. beef exports since the 2003 outbreak of bovine spongiform encephalitis, sometimes called “mad cow” disease.
BSE is still listed as a concern as is ractopamine, a feed additive. The country is working towards a better food safety structure with increased regulations for food producers and manufacturers.
“China has set a food policy,” Black said in the cab of his Case tractor. “The first thing is security, then safety and then sustainability.”
Before the U.S. beef market is reopened, Black said, the Chinese will send inspectors to look over U.S meat processing facilities.
“Once we’re approved,” he said, “they’ll feel confident to opening their border to U.S. beef.”
He said China acknowledges it cannot provide enough food for its 180 million people.
“There are 30 million in Shanghai alone,” Black said. “That was a real eye-opener for an Iowa farm boy, when all of Iowa has 3 million people.”
Black said China imports a substantial percentage of its beef, primarily from India, mostly water buffalo; but also beef cattle from Australia, New Zealand and Argentina.
Leaders said the country will continue to import beef from many sources in order to not become dependent on any one country.
China is not expanding its beef herds, Black said, but is concentrating on its pastures and grass for dairy animals.
However, Black said, China is building cold storage facilities around the country.
Since 80 percent of its meat products are sold in open-air markets expanding refrigeration facilities is necessary to extend food shelf-life.
“We toured a huge brand new cold storage facility in Nanjing,” Black said, “and one being built in Suzhou.
“Each will allow for a thousand or more wholesale meat shops to be indoors, with electricity and near the freezer storage building.
“Beef is usually frozen when sent to China, so they are better prepared to receive and store beef.”
The Chinese, Black said, are like any other people.
“They want quality food and a quality way of life,” he said.
Iowa beef producer Roger Brummett, of Bedford, was also on the trade mission.
“We visited with high Chinese meat traders and staff of the U.S. Foreign Agricultural Service and Agricultural Trade Office to learn about the potential for U.S. beef exports,” said Brummett, who serves as chairman of the Iowa Beef Industry Council. “They presented an overview of the China market and discussed current policy issues between the two countries that need to be resolved before the market opens.”
The urbanization happening in China is resulting in a reduction of farmland.
“On our travels around Shanghai,” said Brummett, “we saw thousands of high-rise housing buildings being built.
“They are building everywhere and significantly reducing the amount of land available for farming.”
Shanghai has the fastest growing E-commerce in the world with young people (born after 1990) ordering food online for delivery to their homes and offices due to the dense population in high-rise housing.
An online USMEF pork promotion resulted in the sales of almost 10,000 metric tons of pork in one week, so there is great potential to market U.S. beef in this manner.
So what does this mean for U.S. beef?
According to analysis by USMEF and the ATO, there is a general distinction between demand for grain versus grass-fed beef.
There is no other supplier that compares to the quality of U.S. beef, Black said. The demand for U.S. beef will be centered in chain restaurants, hotel fine dining and retail hot pot slices.
There is also a market for beef offal as the Chinese eat all parts of the beef animal.
The demand is there, the cold chain is improved, and the domestic cattle supply is declining, so the outlook for U.S. beef exports is good.
Both Black and Brummett said they were impressed with the staffs of the U.S. Department of Agriculture’s foreign agriculture offices and the U.S. Meat Export Federation, who are working hard to create opportunities for beef and pork exports. The beef checkoff contributes funds from both the national and state level to USMEF.
According to USMEF, U.S. beef exports added $277 to the value of a fed steer in February.
The Iowa trade team was coordinated by the Iowa Economic Development Authority and included Iowa Secretary of Agriculture Bill Northey and representatives of the Iowa Pork Producers Association, Iowa Farm Bureau Federation, Iowa Corn Promotion Board and the U.S. Meat Export Federation.
Partial funding for the trade mission was provided by the $1-per-head beef checkoff.