October 1, 2019
US-China trade talks could see relaxed restrictions on beef from growth promotants-treated cattle
An upcoming high-level US-China trade talk may lead to China easing restrictions on US beef that are extracted from cattle treated with hormone growth promotants (HGP), according to a Farm Online report.
As both countries aim to end an ongoing trade war, beef may be the main matter that the United States wants to address and there is a possibility that China's HGP-free protocols could be reconsidered, Chinese red meat analysts said.
Import protocols, coupled with the requirement for HGP-free meats, have restricted US beef entering China's chilled beef market.
Rabobank's senior animal proteins analyst for China, Chenjun Pan, said that if the protocol was reconsidered, there would definitely be a segment of Chinese consumers who would pay a premium for HGP-free beef; however, HGP meat would likely be accepted quickly by the mass market.
"The Chinese Government would educate consumers around HGP being widely accepted by other countries," she said.
China's recent challenge with African swine fever outbreaks in its territories have tightened its meat supply as consumers stay away from pork and look to other meats as alternatives.
Consequentially, the country has become Australia's largest export market for beef, with shipments jumping 65% year-to-July. Also, strengthening trade between and China "means less is going to Russia," Rabobank's Australia-based senior animal proteins analyst Angus Gidley-Baird said.
"Or if the US and China come to an arrangement this month, more US product going into China may influence what the US then wants in its market. Indirect redistribution of product may open other doors for Australia," he added.
Both Gidley-Baird and Pan said that Australia should focus on the fundamental shifts in Chinese demand for beef instead of potentially short-term gains in relation to China's ASF situation. For the Australian beef cattle sector, Argentina and Brazil will be its key competitors in the commodity trade in China, according to Gidley-Baird.
Chinese beef imports have increased by 53% in 2019, but the growth will also widen the gap between Chinese meat production and local demand, Pan said.
Her advice to Australia's beef supply chain is to be strategic and work on long-term relationships.
"It's important to understand what is going on in China and figure out which specific distribution channels you want to work with," she said.
- Farm Online