Trade Is Critical For The Livestock Sector

No one in U.S. agriculture questions the importance of overseas trade to the sector’s health.  The Administration says it has attempted to rebalance trade with overseas partners, and it’s been a difficult challenge for producers with boots on the ground and products to sell.

China Is Not Living Up To Phase One

Kent Bacus, executive director of governmental affairs for the National Cattlemen’s Beef Association, said while he appreciates the intent behind these efforts, it’s time to start realizing some of the benefits.

"I think what we'd really like to see, though, is some of those planes get landed," Bacus said.  "We'd like to see some of those deals kick in and give our producers the opportunity. Because in the middle of all of this, we also had China shut us out of the market entirely, and that was before all the tariff escalation started. That was just them being bad trade partners and not fulfilling their responsibilities in the Phase One agreement. And so, because of that, that's a $1.4 billion market that we don't have access to anymore, and that hits every segment of our industry.”

He noted U.S. beef continues to get locked out of the Chinese market.

“You look at the losses in the processing sector due to China alone, it's pretty significant," said Bacus.  "And it's not just the big four. It's a lot of the small and mid-sized operations, or processors, that were eligible to ship to China. That was going to be a good way to really build that profit margin and, honestly, support a section of the processing sector that we wanted to see more of. We didn't want to see more hooks in the bigger plants. We wanted to see more hooks in regional areas, and without that extra opportunity, it's going to be harder for them to stay in business. For our cow-calf producers, for our feeders, they're seeing this hurt too, because the Chinese eat a whole lot of the cuts that we just can't sell domestically, and, in many cases, not in other markets that we have access to.”

It's Not Just About Access To China

Getting those pending trade deals finalized would bring some of the stability that U.S. agriculture needs.

“That's what we're really hoping to see is those deals actually finalized, to see them implemented, so that we can start taking advantage of that," Bacus said.  "I think that's going to be a big thing for us, but also just for that economic stability we need if we're going to leverage against China. If we're going to do that, then we need access to a lot of these other markets, because the other side of that coin is that all of our competitors already have access to many of those Southeast Asian markets and some of the Latin American markets, too. So, we really do need to balance that trade. We need to see these victories come full circle, and hopefully we'll be there sometime here in the next couple of months.”

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