Food & Beverage

China to reopen beef market to American producers after 13 years

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American beef producers are expected get access to China for the first time in 13 years, raising the possibility that the U.S. could recapture lost market share in one of the fastest-growing global markets.

China shut its market to American beef producers after a case of so-called Mad Cow disease, or bovine spongiform encephalopathy, was detected in the U.S. in late 2003. It is understood that the Chinese Ministry of Agriculture will accept only American beef from animals under 30 months of age.

"I welcome the announcement from China's Ministry of Agriculture that it has lifted its ban on U.S. beef following a recently concluded review of the U.S. supply system," said U.S. Department of Agriculture Secretary Tom Vilsack in a statement. "This announcement is a critical first step to restore market access for U.S. beef and beef products. We look forward to prompt engagement by the relevant authorities for further technical discussions on the specific conditions that will allow trade to resume."

In 2003, China's imports of beef totaled $15 million (or 12,000 tons), including $10 million from the United States. Beef imports to the country started to explode from 2011 to 2012 as the middle class grew, and most of that business was captured by Australia, Uruguay and New Zealand. China's imports reached a record $2.3 billion in 2015, according to the USDA.

The USDA forecasts that China will surpass Japan as the second-largest beef importer (after the U.S.) with imports estimated at 825,000 tons in 2016. The agency said rapidly rising demand for beef has been fueled by middle-class growth and has made China the fastest-growing beef market in the world.

"This is great news for U.S. beef producers," said Kent Bacus, director of international trade for the National Cattlemen's Beef Association. "While these initial reports are positive, we must continue technical negotiations and undergo the process of formally approving export certificates."

Overall, the U.S. exports about 14 percent of its total beef supplies. In 2015, U.S. beef exports totaled $5.8 billion to 112 countries.

The Australians also have competed with the U.S. in selling beef to Japan and Korea, although higher priced Australian beef is expected to slow demand from that country next year and result in gains for American producers. Australia's prices have risen due to a reduction in the herd there following drought conditions.