NE­BRASKA HAS STAKE IN BEEF EX­PORTS

US state sends first batch of steaks to China since ban lifted

China Daily (USA) - - FRONT PAGE - By AMY HE in Omaha, Ne­braska and MAY ZHOU in Hous­ton

Ne­braska Gov­er­nor Pete Rick­etts was ex­cited when he saw off the first ship­ment of US beef prod­ucts on a flight to a client in Shang­hai on June 14. It came af­ter a 14-year ab­sence in the mar­ket, and Rick­etts re­al­ized that it sig­naled a new era for his state’s agri­cul­tural sec­tor.

“Hav­ing a great mar­ket like China open up for us was re­ally fan­tas­tic news for our ranch­ers here, and an in­cred­i­bly ex­cit­ing op­por­tu­nity for our state,” Rick­etts said in an in­ter­view in his of­fice on the day of that flight.

“If we can achieve the same sort of mar­ket share in China as we’ve achieved in other coun­tries, that could mean a po­ten­tial 20 per­cent in­crease in the ex­ports of beef from Ne­braska, po­ten­tially [adding] an­other $200 mil­lion to the econ­omy for us,” the gov­er­nor said. “This is a big deal for us.”

That first test ship­ment to China from Greater Omaha Pack­ing Co, one of the big­gest beef pro­ces­sors in the coun­try, car­ried not only in­di­vid­u­ally wrapped steaks — rib eyes, ten­der­loins and New York strips — but also rep­re­sented a new op­por­tu­nity for cat­tle ranch­ers across the Corn­husker State and other beef-pro­duc­ing states in the United States.

China’s lift­ing of a ban im­posed on US beef im­ports in 2003 — be­cause of a case of mad cow dis­ease — ful­fills one of the achieve­ments of a Sino-US 100-day ac­tion plan, which was reached by Pres­i­dent Xi Jin­ping and US Pres­i­dent Don­ald Trump dur­ing their meet­ing in Florida in April.

Dur­ing the meet­ing, Xi and Trump agreed to es­tab­lish new bi­lat­eral mech­a­nisms, in­clud­ing a com­pre­hen­sive eco­nomic di­a­logue and ini­ti­ate a 100-day eco­nomic co­op­er­a­tion plan, re­garded as win­win moves by ex­perts. In May the two coun­tries an­nounced ini­tial re­sults in ar­eas like agri­cul­ture, elec­tronic pay­ments, fi­nan­cial ser­vices and en­ergy, and pro­posed that China be­gin im­port­ing US beef no later than July 16, ac­cord­ing to a US Depart­ment of Com­merce re­lease dated May 11.

Agri­cul­ture is the big­gest eco­nomic driver in Ne­braska, and beef ex­ports are its big­gest seg­ment. With 18 per­cent of all beef ex­ported from the US com­ing from the Mid­west­ern US state, it is the coun­try’s No 1 beef and beef prod­uct

ex­porter, cre­at­ing $1.1 bil­lion for the state.

See­ing the first beef ship­ment sent to China was “ex­tremely ex­cit­ing for the 1,150 peo­ple who work at Greater Omaha”, said Henry Davis, pres­i­dent and chief ex­ec­u­tive of the com­pany. “It so­lid­i­fied that we’re able to sell beef in any mar­ket around the world and meet ev­ery­one’s re­quire­ments.”

An­gelo Fili, ex­ec­u­tive vicepres­i­dent at Greater Omaha, said China be­came the com­pany’s 69th ex­port coun­try this year, and though the mar­ket con­sumes much less beef than others — around 8 pounds of beef and veal are con­sumed per capita, com­pared with 54 pounds in the US, ac­cord­ing to the Omaha Eco­nomic Devel­op­ment Cor­po­ra­tion — any op­por­tu­nity to in­crease that fig­ure, even min­i­mally, rep­re­sents a pos­i­tive for the in­dus­try.

“Peo­ple al­ways want to be first into the mar­ket, but the re­al­ity is we were first, and China is re­ally a big­ger notch than any­thing we’ve done be­cause it’s such a large mar­ket,” he said.

Ne­braskan ranch­ers have been pre­par­ing for beef trade with China to re­sume since it was an­nounced last Septem­ber that the Chi­nese Min­istry of Agri­cul­ture lifted its ban.

Beef was one of the main fo­cuses of a trade mis­sion that Rick­etts led to China late last year. Ne­braska also has hosted many Chi­nese del­e­ga­tions over the years that have looked at cat­tle ranches and feed­lots, ac­cord­ing to Ne­braska Cat­tle­men, a cat­tle rancher as­so­ci­a­tion.

The state had about 6.45 mil­lion cat­tle as of Jan­uary and is home to 19,000 ranches, as well as Greater Omaha Pack­ing and Tyson Foods. There are four USDA-ap­proved meat­pack­ers for ship­ments to China: Tyson, Greater Omaha Pack­ing, JBS USA and Creek­stone Farms Pre­mium Beef.

The Chi­nese main­land po­ten­tially rep­re­sents a $2.6 bil­lion mar­ket for US beef prod­ucts. The US’ cur­rent top for­eign mar­kets in­clude Ja­pan, Mex­ico, South Korea and Canada, ac­cord­ing to the Na­tional Cat­tle­men’s Beef As­so­ci­a­tion.

Troy Stowa­ter, pres­i­dent of Ne­braska Cat­tle­men and man­ag­ing part­ner at Di­a­mond 6 Feed­ers in West Point, Ne­braska, said the US’ re-en­try to the Chi­nese mar­ket will be a “slow buildup”.

“I don’t think it hap­pens overnight, and there are some re­quire­ments on [the beef ] that will take some time to ful­fill — but we’re ex­tremely grate­ful to be back in the Chi­nese mar­ket,” he said.

Stowa­ter was part of the trade mis­sion to China with Rick­etts and said the Chi­nese im­porters and dis­trib­u­tors he met were ea­ger to get US beef prod­ucts in their mar­ket.

“If we’re able to move ounces per capita into that mar­ket, it’s a big deal for the United States. The other thing is, our rep­u­ta­tion for qual­ity and food safety has al­ready been es­tab­lished in the mar­ket­place,” Stowa­ter said.

The re­sump­tion of the beef trade between the US and China is ex­pected to di­min­ish com­peti­tors’ shares of the Chi­nese beef mar­ket, which has seen most of its im­ports from Aus­tralia, New Zealand and Canada. Be­fore the 2003 ban, 70 per­cent of China’s im­ported beef came from the US. Aus­tralia, which has a strong foothold in the Chi­nese mar­ket, is com­ing off a long drought that af­fected its abil­ity to ex­port, pre­sent­ing an op­por­tu­nity for US ranch­ers and pro­ces­sors.

“US beef is high-qual­ity beef, with our grain-fed pro­duc­tion and that’s in de­mand,” said Jay Wolf, owner of the Wagonham­mer Ranch in Bar­lett, Ne­braska, and for­mer pres­i­dent of Ne­braska Cat­tle­men. “There’re not a lot of places in the world that can com­pete with the United States in rais­ing that kind of meat, so I think we have the prod­uct.”

Mike Cline, pres­i­dent of the Iowa Cat­tle­men’s As­so­ci­a­tion — an­other state an­tic­i­pat­ing re­sum­ing beef trade to China, said mem­bers of his as­so­ci­a­tion, like many others, are learn­ing about the rules and pro­to­col that must be met for US beef prod­ucts go­ing to China.

China’s re­quire­ments are more strin­gent than those of other in­ter­na­tional des­ti­na­tions for US beef, ac­cord­ing to a no­tice from the Iowa Cat­tle­men’s As­so­ci­a­tion to its mem­bers: Cat­tle must be less than 30 months of age, be born and raised in the US, Mex­ico or Canada, be free of growth hor­mones and feed ad­di­tives and be slaugh­tered in the US.

“Ev­ery­body thinks that the po­ten­tial is enor­mous, but we also re­al­ize that it’s go­ing to take pa­tience. It’s go­ing to take time for this mar­ket to fully de­velop a lit­tle on its own,” Cline said. “You just don’t change peo­ple’s di­ets dra­mat­i­cally overnight, but just the fact that we will be able to have our prod­uct avail­able to them to try and in­crease con­sump­tion on a monthly to yearly ba­sis, we’re ex­cited about the op­por­tu­nity.”

While the beef in­dus­try is ex­cited to sell to China, sales are not ex­pected to pick up pace right away, ac­cord­ing to Joe Schuele, vice-pres­i­dent of com­mu­ni­ca­tions of the US Meat Ex­port Fed­er­a­tion in Colorado.

“Cur­rently, only a small per­cent­age of US beef is el­i­gi­ble [for ex­port­ing to China]. The big­gest chal­lenge for US pro­duc­ers in­ter­ested in serv­ing the Chi­nese mar­ket will be to raise cat­tle that meet China’s beef im­port re­quire­ments be­cause meet­ing these re­quire­ments in­creases their cost of pro­duc­tion,” he said.

Schuele said that he ex­pects beef ex­ports to China will be­gin slowly but build over time as US pro­duc­ers raise more cat­tle that meet China’s im­port re­quire­ments.

Data from the ex­port fed­er­a­tion in­di­cate that Chi­nese con­sumers are in­ter­ested in high­end steak cuts, but sev­eral beef cuts such as short ribs, short plate and chuck roll are also es­pe­cially pop­u­lar in Asia.

Terry Branstad, Iowa’s for­mer gov­er­nor who is now US am­bas­sador to China, said in May that the re­sump­tion of US beef ex­ports to China is “huge” and “some­thing we’ve wanted for years and years and years”.

Iowa has about 27,000 beef pro­duc­ers and ex­ported $427.3 mil­lion worth in the first quar­ter of this year, ac­cord­ing to the lat­est fig­ures from the Iowa Beef In­dus­try Coun­cil.

Texas, with the most cat­tle in the US at 12.3 mil­lion head, is an­other state highly an­tic­i­pat­ing US beef trade with China. It ex­ported just over $1 bil­lion in beef and beef prod­ucts in 2016 and is re­spon­si­ble for ap­prox­i­mately one-sixth of all US beef ex­ports.

“For us, any time we can move more prod­uct, it just adds value to what we’re do­ing,” said Robert McKnight Jr, one of the vice-pres­i­dents of the Texas and South­west­ern Cat­tle Rais­ers As­so­ci­a­tion.

“The Chi­nese mar­ket is a big mar­ket and we feel like we have a prod­uct that can com­pete and out­per­form any prod­uct in the world. We truly be­lieve it is the best, safest prod­uct in the world we’re pro­duc­ing here,” he said.

AMY HE / CHINA DAILY, AP

Rancher Jay Wolf of Bartlett, Ne­braska, shows off some of his cat­tle. Top in­set: A host­ess holds a tray of sliced US beef at an event to cel­e­brate its re-in­tro­duc­tion to China in Bei­jing on June 30. Bot­tom in­set: At the same event, US Agri­cul­ture Sec­re­tary Sonny Per­due (cen­ter) laughs with in­dus­try lead­ers Luan Richeng (right) and Craig Uden as they cut into a roast.

GREATER OMAHA PACK­ING / FOR CHINA DAILY

Ne­braska Gov­er­nor Pete Rick­etts (third from left), Greater Omaha Pack­ing Co CEO Henry Davis (left) and other of­fi­cials hold boxes of beef to be shipped by the com­pany to Shang­hai. It was the first ship­ment of US beef to China af­ter China lifted a 14-year ban im­posed be­cause of mad cow dis­ease.

AMY HE / CHINA DAILY

Troy Stowa­ter, pres­i­dent of Ne­braska Cat­tle­men and man­ag­ing part­ner of Di­a­mond 6 Feed­ers, shows cat­tle feed used on his feed­ing lots. Cat­tle are fed a mix of roughage, corn, ethanol byprod­uct and corn sweet­ener byprod­uct.

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