Beef industry feeling impact of Chinese trade tariffs

businessU.S. meat may be moving to other countries, but trade has slowed. That’s the assessment of Margaret Ann Smith, a Rockbridge County cattle farmer and chairman of the livestock marketing council for the National Cattlemen’s Beef Association, regarding tariffs recently imposed by China.

“We’re moving 20 to 25 containers of (U.S.) meat monthly to China after the tariff increase, which is still good, per the U.S. Meat Export Federation. The tariff is 37 percent, where it was 12 percent before the increase,” Smith explained. “Trade is very important to us in the livestock industry. While we understand why the tariffs were imposed, we are hoping this will be quickly figured out, because right now there is a lot of uncertainty. We have no idea what the prices will be like in the future, because it’s all based on trade.”

Jason Carter, executive director of the Virginia Cattlemen’s Association, said the threat of increasing and long-lasting tariffs imposed by China “is a mixed bag for beef producers.”

He noted that while China isn’t the largest market for U.S. beef producers, farmers want to get more of their beef into China and are hoping that, at the end of trade negotiations, some of the non-scientific trade barriers will be removed to open more opportunities.

“Cattle producers are keeping a watchful eye on the progress with U.S. trade negotiations worldwide,” said Wilmer Stoneman, director of agriculture, innovation and development for Virginia Farm Bureau Federation. “Any miscues with other commodities will easily have a ripple effect that will drive market prices for cattle and beef.”

2017 marked the first time in 13 years U.S. beef has been exported directly to China. The Chinese market for U.S. beef presents a $4-billion-per-year opportunity, Carter said. “No other country in the world can come close to the quality of U.S. beef, and it’s very lucrative for us.”

Carter noted that, as far as meat is concerned, Chinese tariffs have had the biggest impact on pork producers; the tariff for pork is 67 percent. “They’re certainly feeling it the most in the livestock industry,” he added.

Most of Virginia’s cattle are sent to the Midwest to be finished and processed, Carter explained. Most finished U.S. beef is exported to Canada and Mexico. In 2017, U.S. beef and beef variety meat exports amounted to 1.26 million metric tons valued at $7.27 billion, and beef exports account for $300 a head for U.S. cattle producers.

Smith said she hopes there soon will be more opportunities for trade with China, with a level playing field. “We want and need long-term market access and want a trade agreement that is effective, so that what works today will still work in 30 to 40 years.”

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