China's "Grey Market" Likely to Cause Confusion as US Beef Industry Begins the Exporting ProcessMon, 03 Jul 2017 11:58:48 CDT
As the industry has focused on US beef’s triumphant return into the Chinese market, one thing being widely overlooked, is the fact that beef produced in America has actually been entering China through its backdoor, or the “Grey Market” if you will, for many years. Oklahoma State University Extension Livestock Economist Dr. Derrell Peel told Ron Hays, Radio Oklahoma Ag Network farm director in a recent conversation, that because of this movement that has taken place under the radar, beef exports going into that country will have to be gradually readjusted overtime, in order to fully understand the level of market saturation happening there, now that the official deal has been done.
“It’s just important for people to keep in mind that we not just look at the numbers associated with China, as we go from here forward and start seeing monthly export totals,” Peel said. “One of the things that may happen is these unofficial flows that have been transshipped to other countries, may now convert to direct flows into China. So, they’ll show up, or some portion of them, as exports to China.”
The fact remains, though at this point, we truly don’t know how it will all eventually play out. Peel says we must wait and see. But, at the same time, he also says it will be important to take a comprehensive look across several markets as we evaluate what is really going on in the Chinese market, as it is likely to take some time before this market finds a permanent foothold.
“I think it’s going to be a work in progress, somewhat tentative in the early stages,” he said. “I’m very optimistic this could be a hugely important market for the US beef industry over time, but I don’t think it jumps to that immediately.”
Listen to Peel speak with Farm Director Ron Hays about the effects China’s “Grey Market” will have on US beef exports now that an official trade deal has been struck, on today’s Beef Buzz.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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