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Iowa Beef Producers investigate beef market in China

Posted on April 12, 2014 at 9:00 AM by Iowa Corn

FOR IMMEDIATE RELEASE

Contact:
Dean Black, Somers, 712-408-3248
Roger Brummett, Bedford, 712-542-7712
Nancy Degner, Executive Director, Iowa Beef Industry Council, 515-296-2305, nancy@iabeef.org

Ames, IA – April 10, 2014 – “There is a hunger for U.S. beef in China. We anxiously await the opening of the market for U.S. beef,” was the consistent message delivered to an Iowa Meat Trade Mission while in China March 31-April 4, 2014.  Iowa beef producers Roger Brummett, Bedford and Dean Black, Somers, represented the Iowa Beef Industry Council on the mission.


China Agricultural Trade Office
“We visited with high Chinese meat traders and staff of the U.S. Foreign Agricultural Service (FAS) and Agricultural Trade Office (ATO) to learn about the potential for U.S. beef exports,” said Brummett, Chair 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,” added Brummett.

The three pillars for U.S. and China relations were listed as food safety, food security and sustainability. China has been closed to U.S. beef since 2003 when the first case of Bovine Spongiform Encephalopathy (BSE) was found, and 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.


“Their cold chain system is definitely improving,” said Black. “We toured a huge brand new cold storage facility in Nanjing 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 urbanization happening in China is resulting in a reduction of farmland.  “On our travels around Shanghai, we saw thousands of high-rise buildings for housing being built,” said Brummett. “They are building everywhere and significantly reducing the amount of land available for farming. Apparently their definition of food security may be changing with China accepting that importing food does not mean China is dependent on another country for their food supply.”

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.

Checking out China's Meat Case
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 vs. grass-fed beef (currently domestic, and from India, Australia and Brazil.) There is no other supplier that compares to the quality of U.S. beef. The demand for U.S. beef will be centered in chain restaurants, hotel fine dining and some 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 were impressed with the staffs of the USDA 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. 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.

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Cutlines:

Meat case:  Iowans explore opportunities for U.S. beef exports to China with the owner of City Shop, an upscale supermarket in Shanghai. Pictured (l to r) are beef producers Roger Brummett, Bedford, and Dean Black, Somers; Bill Northey, Iowa Secretary of Agriculture; and Cui Yi Xiong, president of City Shop.  The Iowa Meat Trade Mission was held March 31-April 4, 2014.

ATO office: Iowa Ag leaders get a market update on U.S. beef and pork in China at the Agricultural Trade Office in Shanghai. (l to r) Rich Degner, Iowa Pork Producers Assn; Roger Brummett, Iowa Beef Industry Council; Bill Northey, Iowa Secretary of Agriculture; Dean Black, Cattlemen’s Beef Board – Iowa; Bob Bowman, Iowa Corn Promotion Board.

About the Iowa Beef Industry Council:  The Iowa Beef Industry Council is funded by the $1-per-head beef checkoff.  Checkoff dollars are invested in beef promotion, consumer information, research, industry information and foreign market development, all with the purpose of strengthening beef demand.  For more information, visit www.iabeef.org

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