Newly open Chinese beef market excites ND ranchers, cattlemen
DICKINSON, N.D. — Decisions made by China routinely make international headlines as its nearly 1.5 billion residents make the country the most populated and largest consumer market globally.
The U.S. government in conjunction with the European Union have for a long time placed scrutiny on the trade and regulatory practices of China in largely unsuccessful efforts aimed at bringing the nation into fair trade deals.
The recent "trade wars" initiated by the Trump administration resulted in the United States scoring a critical success by bringing China to the table for the first time in over a decade, according to Curtis Chin, an Asia fellowship recipient at the economic think-tank Milken Institute.
Despite heavy tariffs, U.S. beef will now be sold in China.
"I think what's really working to the advantage of President Trump is the state of the U.S. economy right now. Really, the U.S. economy is firing on all cylinders," Chin said.
In North Dakota, cattle producers are keen on the opening of the markets because they understand the benefits an increase in wholesale market value beef has for them.
"Whenever you have the chance to feed 1.5 billion people, it's exciting," said Marc Wolf, a cattle rancher on 21Angus Ranch near New England. "One obstacle we face with China is the import duty on USA Beef, which is more than triple the rate of other countries like Australia. U.S. ranchers have a premium product that China wants, so with time this will be a win-win for ranchers in North Dakota."
According to the most recent economic projections by the USDA, economists agree that even a 30 dollar increase in cattle prices could see a U.S. beef market boom on par with that of the early 20th century.
Nationally, beef producers echoed the sentiments of Wolf, expressing excitement with the afforded opportunities coming from the exportation of U.S. beef to China.
"After being locked out of the world's largest market for 13 years, we strongly welcome the announcement that an agreement has been made to restore U.S. beef exports to China," Craig Uden, president of the National Cattlemen's Beef Association, said. "We look forward to providing nearly 1.4 billion new customers in China with the same safe and delicious U.S. beef that we feed our families. I look forward to the day when we can serve President Trump and President Xi a dry-aged American-made New York strip in Beijing."
The Organization for Economic Co-operation and Development's annual assessment predicts that beef will become the fastest-growing import sector in China over the coming years, with China continuing to top the world meat consumption rankings annually.
China's total beef consumption is expected to reach around 8 million tons by 2020, bringing the United States and Australia into direct competition in cornering a vastly growing market — a prospect that North Dakota ranchers are excited about.
Clark Price wears an old ranch hat while running cattle on his Hensler area ranch. He also wears many figurative hats during his hectic work schedule as a North Dakota Stockmen's Association member, ex-officio board member of the North Dakota Beef Commission, director of the U.S. Meat Export Federation and chairman of the Global Growth Committee for the Federation of State Beef Councils.
"Today we have very little quantity going into China, but we're still in a beginning stage," Price said. "There are over 300 million middle-class Chinese, so gaining even a 20 percent foothold of the share would benefit North Dakota ranchers greatly."
Price said the value of beef will increase greatly over time as more corn- and grass-fed beef enters the Chinese market.
"While it's a hard number to come up with exactly, I would figure the price of cattle will climb no less than $50 dollars a head, back to the ranchers," Price said. "A better estimate would be closer to $100 a head once the Chinese realize that the quality of USA beef is superior to that of Australia."
There are currently about 1.86 million beef cattle and calves in North Dakota, according to the North Dakota Department of Agriculture. That's more than two cattle for every person in the state. One 1,200-pound beef animal produces enough meat to make about 2,100 quarter-pound hamburgers — approximately 750 pounds of yield.