Chinese Market Access Holds Enormous Potential for US Producers, Peel SaysTue, 06 May 2014 15:10:22 CDT
The lack of access into the Peoples’ Republic of China has been a major frustration to the U.S. cattle industry since the 2004 mad cow disease scare. There have been attempts by Washington over the years to bring the barriers down, but, so far, without success. Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel says that when the barriers do fall, the impact will be enormous.
“Chinese demand, in general, is growing for just about everything you can imagine as progress happens in that country. The U.S. doesn’t officially have trade access from a beef standpoint to the Chinese market yet, but we know that there’s U.S. beef getting into China already through Hong Kong, through Vietnam, through some other trans-shipment points. And, obviously, at some point, we’ll work out the political differences and get access to that market, but I do think there’s tremendous potential in the Chinese market for beef in particular.”
Peel says it’s simply a matter of numbers.
“I often remind producers of what I call the ‘Rule for Chinese Markets.’ And the Rule for Chinese Markets is very simple: 1.4 billion times any number is a big number. And I think that’s a good thing to keep in mind because the growing economic power in China suggests there’s going to be demand for just about anything you can think of.”
He says that demand is already being felt as China pulls in beef from other countries, creating a vacuum effect in those countries which in turn increases their demand for U.S. exports.
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