No Time for Trade Hiccups
The future is here.
That’s how Trevor Amen would portray international beef trade, particularly with China. He’s a livestock economist for CoBank and is straightforward about international markets for U.S. beef: We need them, and we need them to grow now.
“We have excellent demand for beef here in our domestic markets, and it will continue to grow,” he says. Domestic growth is destined to be incremental, however, based on modest population growth.
Contrast that to what’s happening in China. In the next five years, that country will add 160 million people to its middle class. It could do that again in the five years after that.
They are all rising meat eaters, with more beef on their wish lists.
The wait is over
Seemingly for decades, there’s been talk about China’s rising middle class and how it will demand a better diet with more protein. Finally, says Amen, the wait is over. Now, can we take advantage?
He thinks so, provided we get our regulatory house in order and comply with the growing international demand for animal identification and traceability back through the supply chain.
Amen says U.S. beef producers have considerable advantages in the world marketplace: a grain-fed product, plenty of processing capacity, a good food safety record, and a well-developed trade infrastructure.
Our world beef competitors – Brazil, Australia, and Argentina – want to expand beef trade, too. None of those countries have the whole package that we do.
The risk to the U.S., Amen says, is having a trade hiccup or reshuffling of preferred exporters. TPP and NAFTA could be that hiccup.
Right now, China is not even one of our top five markets for U.S. beef. Those would be Canada, Mexico, Japan, South Korea, and Hong Kong. China’s population of 1.3 billion people and that surging middle class make it the prize target market.
The growth of its consumer spending power is a little like adding a brand-new country to the First World every five years.
What can you do?
Stay focused on your natural advantages that make you good at producing beef, says Amen. That would include good genetics, nutrition, and food safety.
Help the industry develop the appropriate traceability system to backtrack beef. Some segments of the industry are working on that as we speak.
“Technology is going to create a system that is efficient and robust,” believes Amen. “It is important that we have the supply available and a seat at the table of beef trade.
“We’re in uncertain times, but I’m hopeful that we’ll take advantage of all these developments. I’m optimistic,” he says.
Can we get cattle traceability?
One requirement for expanded beef trade with countries such as China is the insistence on traceability. In a disease outbreak or a contaminated beef incident, China wants assurances of transparency.
The issue of traceability to a specific farm has been hotly debated for years and never fully implemented. Most beef producers are skeptical of it, surveys show. Who pays for it? Is Big Brother dictating to you?
The National Cattlemen’s Beef Association recently commissioned a study of the interest and feasibility of beef traceability (conducted by World Perspectives, Inc.). You can find the full report at beef.org.
While the study verified the ongoing skepticism, it noted that as many as 20% of all beef producers already participate in voluntary ranch-of-origin traceback programs.
Some of those include source and age verification programs, Beef Quality Assurance, high-quality beef programs, verified natural or grass-fed beef, animal welfare verification, non-GMO feed verification, and USDA organic.
Traceability can be done. The study authors think that investing in an industry-wide ID and traceability system could pay for itself in 10 years by gains in domestic and export market demand.