Last Thursday, the U.S. Secretary of Commerce Wilbur Ross announced a series of agreements that were reached with China in the early stages of an ongoing, 100-day session of trade talks. Although critics point out that the talks have not yielded progress on the kind of longstanding issues that have plagued American trade with China, some industries still stand to profit handsomely.
By July 16th, China will begin accepting American exports of beef for the first time since 2003, when the Asian superpower imposed a ban in the midst of growing fears about mad cow disease. A conditional lift of the ban was implemented last year, but didn’t have much impact on the market due to stringent requirements such as no cows over thirty months old and import protocols that had not yet been developed.
The new deal struck on Thursday opens up a market of more than 1.4 billion Chinese consumers who have seen a ravenous increase in their appetite for beef. In 2003, China imported $15 million worth of beef, but thanks to a growing middle class, that number grew to more than $2.3 billion in 2015. “It’s a very big market; it’s at least a $2.5 billion market that’s being opened up for U.S. beef,” Ross said during Thursdays announcement.
The deal will have a massive impact on the 727,906 beef farms and ranches in the United States that oversee 31.2 million beef cows, and recorded over $67 billion in cash receipts in 2016 alone, according to the National Cattlemen’s Beef Association.
In exchange for the deal on beef, China will now be able to start exporting cooked poultry to the United States. Raw poultry will potentially be on the table in the future, but will require the same equivalency standards to U.S. meat safety practices that cooked poultry has already met. Concern about Chinese poultry still lingers due to the nations abysmal food safety track record.
Through the first three quarters of 2016 alone, the Chinese Food and Drug Administration found more than 500,000 violations. Counterfeit food products, fake ingredients, and contaminated food products were just some of the issues the Chinese FDA found in the report. The food safety scandals are nothing new for China though, with documented cases of rat meat being sold as lamb, gutter oil being sold as cooking oil, and baby formula containing industrial amounts of melamine that resulted in six dead alongside hundreds of thousands of sick babies.
The trade deal is being welcomed with open arms among U.S. beef producers though. “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.” Said NCBA President Craig Uden in a statement released last Thursday. “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.”