China’s beef imports continue to soar, but obstacles for U.S. beef increase

Total import duty on U.S. beef is now 47%.


Joe Schuele, Vice President, Communications, U.S. Meat Export Federation (USMEF)

via BEEF Magazine - Sep 12, 2019


China has solidified its position as the fastest-growing beef import market in the world in 2019, with Oceania and South America the dominant suppliers. Last year, China’s imports topped 1 million metric tons (mt) for the first time at 1.07 million mt, up 50% from 2017, while value climbed 56% to $4.9 billion.


This remarkable rate of growth has further accelerated in 2019, as imports through July already reached 871,429 mt (up 57%), with value up nearly 60% to $4.1 billion. For perspective, China’s full-year imports first topped $1 billion in 2013 and broke the $2 billion mark for the first time in 2015.


As other suppliers scramble to meet China’s surging beef demand, barriers for U.S. beef continue to mount. Since mid-2018, U.S. beef has been subject to a 25% retaliatory duty in China, raising the effective tariff rate to 37%. On Sept. 1, China imposed an additional 10% duty, raising the effective rate to 47% - nearly four times the standard 12% duty imposed on most imported beef.


New Zealand and Australia have even more favorable access through their free trade agreements with China, with New Zealand beef entering the market at zero duty and Australian beef tariffed at only 6%, though the rate will be 12% through the end of 2019 due to imports exceeding the safeguard threshold established in the China-Australia Free Trade Agreement.


When U.S. beef re-entered China in 2017 after a nearly 14-year absence, the U.S. Meat Export Federation (USMEF) cautioned that it would take time to establish a presence in the market, especially because China requires imported beef to be free of ractopamine and synthetic growth hormone residues. The need to raise and process cattle specifically for the market also creates the challenge of merchandising all beef cuts from China-eligible cattle, rather than just those items most in demand.


Nevertheless, the market opening still generated considerable excitement in the U.S. industry due to China’s enormous long-term potential. But higher tariff rates and the growing uncertainly of the U.S.-China trade relationship has made gaining a foothold for U.S. beef an even more formidable task than anticipated


In 2018, the first full year of access for U.S. beef, exports to China totaled about 7,300 mt valued at $60.8 million. Through the first half of 2019, exports were 5% ahead of last year’s pace in volume (3,846 mt) but slipped 9% in value to $30 million.


U.S. beef competes most directly with Australian and Canadian grain-fed beef in China, a segment that Australia currently dominates. From January through July...


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