Will the Livestock Industry Benefit from the U.S.-China Trade Deal?

Livestock Benefit US China Trade 010320
( AgDay )

Soybean producers won’t be the only ones to benefit from a new trade deal with China. Livestock producers have a lot to gain, too, said Ted Seifried of Zaner Ag Hedge.

Seifried joined AgDay’s Clinton Griffiths to discuss the potential impact of the trade deal with China on the livestock industry.

From a pork perspective, everyone knows that China has African swine fever (ASF) and they need a lot of pork, Seifried said. 

“The problem that we've had in 2019, is that a lot of our pork supplies have ractopamine and China won't accept that,” Seifried said. “But a lot of the majors, all the majors really, have moved to non-ractopamine. That really opens up our potential market to China and that could be really good.”

However, he said it may not happen right away. He expects it to develop over the course of 2020 but sees reason for optimism for U.S. pork exports.

Beef exports may present biggest gains of 2020
However, Seifried said beef is the more interesting topic right now. Although beef has not been a staple of the Chinese culture, demand is growing. He believes there is a lot of opportunity for the U.S. to grow beef exports to China.

“[Beef] might be the biggest gain that we have of the agricultural products that we'd be able to sell to China,” Seifried said.

He said it’s hard to gauge, but with the recent rally in cattle prices, he believes the future looks promising.

“I'm really optimistic that China does want more of our beef than what we're currently expecting,” he said. 

The U.S. has talked for years about trying to open the door and get into China with U.S. beef, Griffiths added. Maybe now is the time?

“I still think there's more upside potential for cattle and then if China comes in and starts buying aggressively, then things could get really interesting,” Seifried said.


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