Iowa beef producers eager for Chinese market to open

It would provide producers access to a large customer base

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Beef producers in Iowa and across the nation are eagerly awaiting the possibility of selling their products to Chinese consumers nearly six months after China said it would drop a ban on U.S.-made beef.

“The big picture: There’s a lot of opportunity there — 1.3 billion mouths that would potentially be interested,” said Matt Deppe, CEO of the Iowa Cattleman’s Association.

Fueled by a meeting between the presidents of the United States and China, reports surfaced early this week that China was willing to open its market to the United States’ beef and financial markets. The move would be welcome news to beef producers nationwide who have been cut out of the Chinese market since 2003.

Access to China would be a boon for Iowa’s 27,000 cattle operations, said Chris Freland, executive director of the Iowa Beef Industry Council.

“This would be a large boost in the right direction to get supply and demand back in sync,” Freland said.

While Iowa is known for its production of corn, soybeans, eggs and pork — it ranks first or second in nationwide production for each — the state also has a sizable cattle industry. Iowa had 965,000 beef cattle as of Jan. 1, the ninth most in the country. The state has the fourth most cattle-on-feed — that is, placed in feedlots before going to market.

On Monday, Gov. Terry Branstad — who is awaiting confirmation to be the new U.S. ambassador to China — said he is supportive of opening up the Chinese market to Iowa-made beef.

“I want to be able to serve Iowa premium beef at the embassy and the ambassador’s residence,” Branstad said during a weekly news conference.

Deppe said his group is “excited and anxious” about Branstad becoming ambassador, due to the governor’s long relationship with China and its president, Xi Jinping.

Should China resume beef imports, it will take time for producers in Iowa and the United States to build up market share, said Lee Schulz, an extension livestock economist with Iowa State University.

“We’re not the only player in town,” Schulz said.

China put a ban on imports of United States beef after a case of mad cow disease was reported in the state of Washington in 2003.

Chinese officials said last September that they finally would lift the ban. It’s removal, though, doesn’t mean producers here can start shipping product to China, explained Joe Schuele, vice president of communications for the Denver-based U.S. Meat Export Federation.

Since September, the U.S. Department of Agriculture and its Chinese counterparts have had to negotiate requirements for U.S. beef exports, such as product traceability, Schuele said.

“That work has been ongoing,” he said. “It’s not that nothing has happened since September, but they haven’t reached agreements on those terms.”

President Donald Trump met with President Xi last week. Before the meeting, three national beef industry groups, including the Federation, sent a letter to Trump, urging him to discuss beef exports during the meeting.

Citing unnamed sources, the Financial Times newspaper reported Trump and Xi agreed deals had to be formed within the next 100 days.

Sean Spicer, the White House press secretary, confirmed the two had discussed creating a “100-day initial plan,” but no agreements have been finalized between the two countries.

“So the plan was to put together a plan, and there’s a lot of pieces that both sides would like to see in there and these benchmarks between now and those 100 days,” Spicer said during a press briefing Monday, according to a transcript.

Opening of the Chinese market now also would be significant, Schule said, because Chinese consumers are eating more beef, especially compared to five years ago.

When the ban was put in place, “China wasn’t a large beef importer,” Schuele said. “That really started to shift about five years ago and last year China imported $2.6 billion of beef.”

Per capita consumption of beef and veal in China rose 33 percent between 2012 and 2016, according to data compiled by Bloomberg.

In 2003, the United States’ beef exports totaled more than $3 billion, with about $78 million of that heading to China and Hong Kong, according to U.S. Meat Export Federation data. The country exported about $2.6 billion worth of beef in 2007 and about $6.3 billion in 2016.

China is one of Iowa’s top trading partners. In 2016, it ranked fourth behind Canada, Mexico and Japan, but was the third-largest importer of Iowa-made goods in 2015.

Two years ago, Iowa exported about $1.2 billion worth of goods to China. That fell to about $490 million last year, according to the Census bureau.

Both Freland and Deppe said organizations representing beef producers have maintained connections in China despite the almost 14-year-old ban.

“In Asia, the culture is very much relationship building. We were hopefully optimistic that the door would open at some point,” Freland said.

Gazette reporter James Lynch contributed to this report.

l Comments: (319) 398-8366; matthew.patane@thegazette.com

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