Beef Trade and China

By Bridger Feuz

 Published on Jan. 25, 2020

 When it comes to beef exports, China lags far behind our top four trading partners.  Does that mean China/U.S. trade negotiations don’t have an impact on the beef market?  Well, if we are comparing the impact to the impacts on pork or wool prices than no, but there is still an impact on the beef industry.  

            The China trade negotiations serve to introduce some uncertainty in the market, and uncertainty leads to volatility.  

Also, much of the market’s reaction to the China trade negotiations is based on future potential, not current numbers. Let’s take a look at our overall trade situation from 2019.

            The U.S. beef industry spent the majority of 2019 as a net beef exporter. Meaning, more beef was exported to countries than was imported on a monthly basis.  Another positive is that during 2019, our net imports were significantly below the five-year average for net imports.  

            The industry’s net imports were consistently 20 million pounds a month below that five-year average.  Certainly, low cull cow prices with ample supply help that equation, as much of our imports are lean beef for leaning out burger grinds. Other factors influence that balance as well such as the dollar exchange rate, Australian productions conditions, etc.

            The U.S. beef industries four top export markets, in order, are Japan, South Korea, Mexico and Canada. 2019 monthly beef exports to Japan ranged from 56 million pounds per month to 77 million pounds per month.  Japan exports averaged three to five million pounds per month more than the five-year average. 

            South Korea is a very close second, with monthly exports ranging from 49 million pounds per month to 67 million pounds per month.  Mexico averaged just over 30 million pounds per month and Canada averaged just over 20 million pounds per month.

            So how do the U.S. beef industry exports to China compare to the other four major export markets? Exports of beef to China were up in 2019 as compared to the five-year average.  

            In fact, they were up an impressive 400 percent.  Although that sounds impressive, if we look at the scale of trade with China, it’s not quite as impressive.  The five-year average beef exports to China on a monthly basis is 0.6 million pounds.  

            The 2019 average was 2.4 million pounds per month. If we compare that monthly total to the big four, we can see it is still a very small portion of the market.  It’s only about 10 percent of the smallest of the big four, Canada’s monthly total.  It’s only about four percent of the largest of the big four, Japan’s monthly total.

            So far, the numbers we have discussed above have been in terms of millions of pounds of beef.  Let’s look at the value of our exports as compared to the imports.  In 2018 the value of the U.S. Beef Industry exports was worth $2.17 billion more than the exports.  

That dollar figure accounts for beef, hide and offal.  We won’t know for sure the 2019 values for a while, but I would project them to be very close to 2018, perhaps slightly less.  Still a big boost to the industry when we are talking $2 billion dollars in value.

            Bridger Feuz is the University of Wyoming Extension livestock marketing specialist. He can be reached at bmfeuz@uwyo.edu.