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China Not a Factor in US Beef Exports... Yet - Still Holds Great Potential for Long-Term Market Value

Mon, 15 Jan 2018 15:20:44 CST

China Not a Factor in US Beef Exports... Yet - Still Holds Great Potential for Long-Term Market Value Mondays, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel examines why China is not a factor in US beef exports...yet.


"The latest beef trade data for November shows continued improvement in beef exports. November beef exports were 260.7 million pounds, up 2.7 percent over exports in November, 2016. Beef exports have increased year over year each month in 2017 for the first eleven months of the year. For the year to date, beef exports are up 13 percent over one year ago.



"Beef exports to the five major destinations are each up for the year to date. Exports to Japan are up 27.6 percent year over year. Japan is the largest U.S. beef export market and accounts for 29.5 percent of total exports for the year to date. Second largest is South Korea, up 6.1 percent through November and representing 16.6 percent of total exports. Mexico is the third largest beef export market, up 7.5 percent for the year to date and accounting for 14.7 percent of beef exports. An 11.1 percent year over year increase in beef exports to Hong Kong makes it the fourth largest export market, slightly larger than number five Canada. Hong Kong accounts for 11.1 percent of beef exports with Canada at 10.9 percent. These five markets represent 82.8 percent of total beef exports for the first eleven months of 2017.



"There is much interest in the market potential for U.S. beef in China since access was achieved in 2017. Monthly beef exports to China are still very small but appear to be growing sporadically. In November, beef exports to China were 1.97 million pounds, making China the tenth largest U.S. beef export market. This level was slightly less than beef exports to the Philippines and represented 0.75 percent of total November beef exports.



"USDA’s Foreign Agricultural Service has projected that China will import 2.26 billion pounds of beef in 2018. At the current level, U.S. beef exports to China would represent roughly one percent of Chinese beef imports. If the U.S. were to increase beef exports to China tenfold to a ten percent market share, it would make China the fifth largest beef market for beef exports and add roughly ten percent to total U.S. beef exports. However, growth this rapid seems unlikely in 2018. Such a level may be more feasible in three to five years. Still, it is difficult to anticipate how markets will evolve and growth could happen more quickly than is apparent now.



"Total U.S. beef exports are projected to increase another 2.5 to 3.5 percent year over year in 2018 to a new record level. This is expected to include some growth in exports to China but the total contribution of beef exports to China is likely to remain limited in the near term.   Longer term, there is great potential for U.S. beef in China."




   

 

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