Page 12 - MWC 9-15-2022s2

TENSIONS dards if the U.S. health status The Midwest Cattleman · September 15, 2022 · P12
continued from page 3 would change. Four, it allowed deal with no single month top- complex more vulnerable to
for the importation of beef and ping a million lbs. exported. the perceived subjective poli-
U.S.-China Trade Agreement beef products into China that China is now the third largest cies in China. One can test for
The U.S.-China trade agree- was inspected by the USDA’s importer of U.S. beef based on this using a measure of mar-
ment did five primary things Food Safety and Inspection total quantity importing an ket concentration (see Tonsor
for the U.S. beef industry. One, Service (FSIS). Five, China average of 35 million lbs. of (2018) for a detailed example).
it allowed for the continued adopted maximum residue beef per month in 2021. Japan Between 2010-2019, the aver-
protocol for the importation limits for several hormones. and South Korea continue to age measure of concentration
of U.S. beef and beef products Collectively, these five condi- remain the U.S.’s largest trad- was 0.128 (0 is highly com-
into China. Two, China elim- tions allowed for more beef to ing partners with an average petitive and 1 is highly con-
inated the cattle age require- enter mainland China. monthly export quantity of 58 centrated). When the Chinese
ments for the importation of and 51 million lbs., respective- stepped in and started buying
U.S. beef and beef products. Historical Performance ly. The total quantity shipped U.S. beef beginning in 2020,
Three, China recognized the of Chinese Imports of U.S. to the U.S. from China in 2022 the measure of concentration
U.S. beef and beef products Beef is higher than in 2021 by changed from 0.152 to 0.146
traceability system, acknowl- There was a minimal about 10 million lbs. more per in 2020 and 2021, respective-
edged that there was a negligi- amount of beef that entered month. This brings their cur- ly. Year to date, the measure of
ble risk of bovine disease, and directly into mainland China rent market share to 17% of concentration in 2022 is 0.149.
agreed to follow the OIE stan- before the two-phase trade total U.S. beef exports. Based The U.S. beef export market

on data from 2021, we should has become more concentrated
see seasonal exports to China in recent years but is far less
increase through August and concentrated than it was in
then expect some decrease the 1990s when the measure
through the latter part of the of concentration was approxi-
year (see Figure 1). Granted, mately 0.312. In other words,
this seasonality could differ the U.S. beef export market is
given the industry only really not as vulnerable as some in-
has one complete year of pur- dustry participants currently
chase information. claim (see Figure 2).
Vulnerability of the U.S. U.S. Beef Export Market
Beef Complex to Chinese Stronger After BSE?
Policies The concerns with China
Some industry participants highlight a larger story about
have expressed concern that how sensitive the U.S. beef ex-
the Chinese entering the mar- port market is to both internal
ket now makes the U.S. beef and external shocks. The larg-
Figure 1
FEEDER CATTLE fall. Beef cow slaughter lev- setting up for a seller’s mar- decline, mostly due to an ex-
continued from page 3 els remain 14% above 2021 ket for feeder calves. pected decrease in beef pro-
levels. High placement lev- I also wanted to take a duction. However, the combi-
cow-calf operators that calve els of light weight feeders quick look at beef export lev- nation of high cow slaughter
in the spring and will be has been another trend due els as those have not gotten and early placement of cattle
marketing calves in the com- to dry conditions in much of a lot of attention in recent on feed, has kept beef produc-
ing months. The chart below the country. Given the con- months (see chart). Through tion higher than expected.
shows steer calf prices in the tinued reduction in the size the first six months of 2022, While exports are expected
Southern Plains, which have of the beef cow herd, this was beef exports have been 7% to slow in the 4th quarter as
been increasing through July likely to be a smaller fall calf higher than last year. Also re- beef production decreases, it
and August. run had weather not been a member that 2021 was a re- does appear likely that a new
It is becoming more appar- challenge. But, when combin- cord year for US beef exports. record for beef exports will be
ent that the supply of calves ing that with the drought im- At the start of 2022, most ex- set in 2022.
is going to be very tight this plications, fundamentals are pected beef export levels to