PEORIA, Ill. — U.S. beef producers learned last month the Chinese export market had reopened to them for the first time since 2003 – a market worth an estimated $2.6 billion to the U.S. beef industry, according to House Committee on Agriculture and others.

 

The lifting of the embargo on U.S. beef products is credited to the U.S.-China 100-Day Action Plan, which brought together leaders from both nations to negotiate details of a protocol for U.S. beef exports. The agreement was announced June 12, with U.S. beef exports to China commencing shortly afterward.

While the deal initially serves to benefit U.S. cattle producers, the trickle-down effect will further benefit farmers who produce grain for cattle feed. More corn and soybeans will likely be needed to help meet the feed demand for additional beef products to China.

Grain commodity groups are analyzing the projected needs of the Chinese market in order to meet demand, and adopting a wait-and-see attitude as to exactly how much of an increase in production will be justified. Jim Bauman, National Corn Growers Assoc. (NCGA) director of market analysis, said increasing demand for U.S. corn in all forms is NCGA’s first priority.

“We congratulate and support the U.S. beef industry on their efforts to reopen the Chinese market. Every additional pound of U.S. beef exported equates to additional demand for U.S.-grown corn.

On average, nearly 3.5 pounds of corn  and 1.4 pounds of distillers dried grains (DDGS) are used to produce one pound of U.S. beef,” said Bauman, in an email.

In 2015, red meat exports added 45 cents to the price of corn, according to NCGA research. Based on an average yield of 200 bushels per acre at $3.60 per bushel, an additional $90 per acre in revenue was generated.

“The NCGA supports our important partners in the beef industry and we strongly support increased market access for beef exports,” he said. “State corn organizations have invested corn checkoff dollars heavily towards expanding overseas markets for decades. Meat exports are an important part of NCGA’s commitment to maintaining and building profitable demand for corn. We look forward to working closely with our partners in the beef industry to build demand for their product both at home and abroad.”

The Illinois Soybean Assoc. (ISA) issued the following statement regarding the expected increase in demand for soybeans and the value of the beef export agreement: 

 

“The ISA checkoff program values the market potential with the resumption of U.S. beef exports to China. In the U.S., beef cattle consume more than 1.4 million tons of soybean meal per year. Beef cattle also comprise an important market for soybean hulls. Illinois soybean farmers look forward to supplying feed to produce high-quality U.S. beef for the Chinese market. “Because the market opening agreement includes requirements that will involve an adjustment period for the U.S. industry, it is difficult to predict the market potential for U.S. beef exports to China. Chinese beef imports are projected at 950 metric tons.

Before the ban, the U.S. held 70 percent market share for these imports, but it will take time to regain that market. “For soybean farmers, raising more beef cattle does create more demand for soybean meal. A 100-head beef barn will use an estimated four tons of soybean meal per year to feed cattle.”

Soy hulls are used as a valuable beef and dairy cattle feed after being separated during the crushing process.

Seventy-three percent of every bushel of crushed soybeans is made into meal, 18 percent into soybean oil and 6 percent is used as hulls, according to Illinois Field  and Bean (March 2016). “Nearly 80 percentof each soybean becomes feed,” said John Hagenbuch, a soybean grower from Utica and an ISA director. “Animal agriculture is the top market for soybeans.”

A farmer and rancher who serves on the U.S. Agricultural Trade Advisory Committee and operates a beef cattle feedlot anticipates value to be added as a result of the China trade deal. “With the fact that we will be able to move more product, we are ultimately shipping corn and beans in another product to China,” said Steve Fogelsong, who owns Black Gold Ranch and Feedlot in Astoria, Ill. 

 

“The ISA checkoff program values the market potential with the resumption of U.S. beef exports to China. In the U.S., beef cattle consume more than 1.4 million tons of soybean meal per year. Beef cattle also comprise an important market for soybean hulls. Illinois soybean farmers look forward to supplying feed to produce high-quality U.S. beef for the Chinese market. “Because the market opening agreement includes requirements 

that will involve an adjustment period for the U.S. industry, it is difficult to predict the market potential for U.S. beef exports to China. Chinese beef imports are projected at 950 metric tons.

Before the ban, the U.S. held 70 percent market share for these imports, but it will take time to regain that market. “For soybean farmers, raising more beef cattle does create more demand for soybean meal. A 100-head beef barn will use an estimated four tons of soybean meal per year to feed cattle.”

Soy hulls are used as a valuable beef and dairy cattle feed after being separated during the crushing process.

Seventy-three percent of every bushel of crushed soybeans is made into meal, 18 percent into soybean oil and 6 percent is used as hulls, according to Illinois Field and Bean (March 2016). “Nearly 80 percent of each soybean becomes feed,” said John Hagenbuch, a soybean grower from Utica and an ISA director. “Animal agriculture is the top market for soybeans.”

A farmer and rancher who serves on the U.S. Agricultural Trade Advisory Committee and operates a beef cattle feedlot anticipates value to be added as a result of the China trade deal. “With the fact that we will be able to move more product, we are ultimately shipping corn and beans in another product to China,” said Steve Fogelsong, who owns Black Gold Ranch and Feedlot in Astoria, Ill.