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New Deal Allows U.S. To Export Beef To China

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The U.S. has opened a new trade deal with China which will give producers access to 1.4 billion new consumers. Dillon Feuz, a professor of applied economics at Utah State University, said this trade deal is a big step for U.S. producers with the direction China is going.

“As their economy is growing, their population is getting more of a disposable income,” Feuz said. “Then people like to upgrade their diets and beef is usually one of those things that follow. It has the potential to come back and add several dollars at the farm ranch level.”

It doesn’t take much with per-capita beef consumption to change what farmers and ranchers make, according to Feuz. If China were to become like Japan, South Korea, Canada and Mexico, which are the largest customers for U.S. beef, there would be a positive increase for American producers.

Feuz said in order to take advantage of the new trade deal, farmers and ranchers don’t really have to change what they are doing. They can continue to sell their commodities as they have done in the past, and the meat packing plants will do most of the negotiating.  Some beef producers, however, are in the niche markets and will have to cater to those specific demands in the Chinese market.

This new deal with China has the potential to impact farmers and ranchers in the U.S. What about consumers here at home?

“The beef herd is growing a little bit,” Feuz said. “So we’re seeing the prices soften from what they were two or three years ago. If China becomes a major trading partner they could probably offset that increase in cow numbers.”

That means beef prices for consumers in the U.S. would go up because there would be more beef sold in China, according to Feuz. However, this isn’t always the case. In some foreign markets, consumers buy things like liver, heart or tongue - products U.S. consumers don’t usually eat.

“That doesn’t impact the price of beef at all that U.S. consumers are paying at the restaurant or at the grocery store,” Feuz said. “But it does impact how much farmers and ranchers are getting for their cattle because it’s raising the overall price of beef products.”

Feuz said it will probably be at least a year or two before we actually see any impact from this trade deal.