China envoy, Senator co-host agricultural cooperation forum in heart of beef country
Craig Morgan, a cattleman in Belgrade, Montana, stays busy every day in the saddle running his 125-year-old, 80,000-acre family ranch.
He has never been to China but said he and others talked recently about making the trip. “I would love to see it someday,” he said.
The idea arose after Morgan realized that the cattle raised on his ranch may end up on dinner tables in China after the country lifted the 14-year-old ban on US beef imports that was imposed because of mad cow disease.
The lift was announced when Chinese President Xi Jinping and US President Donald Trump met in Mar-a-Lago of Florida in early April. In exchange, the US agreed to allow the sale of Chinese cooked poultry in the US.
“It’s a great opportunity,” said Morgan, adding that his cattle raised in Montana’s high elevation open country are very healthy and good quality and sought after by ranches in the Midwest.
On Friday morning, the backyard of his Morgan Ranch House hosted an agricultural forum co-chaired by Chinese Ambassador to the US Cui Tiankai and US Senator Steven Daines of Montana. Participants also included representatives of Montana ranches and farms, as well as a dozen commercial and agricultural officials from the Chinese embassy and US-based Chinese companies.
“China is the second-largest beef import market in the world. This is a tremendous opportunity for Montana,” said Daines, who travelled to China in April after the announcement of ban lift. On that trip, he brought a box of Montana steaks and an American flag with a cow logo as gifts to Chinese Premier Li Keqiang.
Daines said agriculture is Montana’s single largest economic driver. “So by driving access to these markets, by shipping more beef into China, more grain into China, more sugar beets into China, it will increase jobs here in Montana, increase wages. And that’s a big win,” said Daines, who previously worked many years for Procter & Gamble in Hong Kong and on the Chinese mainland.
“We need it so badly now in Montana because of the revenue shortfall that is hitting the hell out of us. One way we can solve that problem is to ship more products to great markets like China,” he said.
China is the largest market for US agricultural exports, with a total value of $21.4 billion in 2016, according to US statistics. Soybeans account for two thirds of US exports. The US also runs a large surplus in bilateral agricultural trade.
Cui was just back to the US after three weeks in China. “People in China are also excited about the opportunity to have their first taste of American beef, especially from Montana,” he said.
He recalled his first visit to Montana in 2013 at the invitation of Max Baucus, long-time US Senator from Montana who later became ambassador to China. During that visit, Cui learned about the state’s high-quality wheat, barley and other farm products.
“There is a growing demand for such quality food in China,” Cui told the gathering. “We have a huge population base – 1.4 billion people. And maybe a quarter or one-fifth of them are becoming middle class people. They have rising incomes. They have a growing demand for real quality beef, grass-fed beef and all natural, good quality barley.”
According to Wei Zhenglin, the agricultural attach from the Chinese embassy, per capita beef consumption in China is only 5 kilograms a year, compared to the world’s average of 10 kilos. “So you can imagine that if we can reach the global average of beef consumption of 10 kilos per person, that’s about 6.5 million tons of beef we need at least,” he said.
According to official customs data, China imported $2.5 billion worth of beef in 2016, with total shipments of 579,836 tons.
Fred Wacker, a rancher who also represents the Montana Stock Grower’s Association, said he is very excited about the Chinese market. Wacker just concluded a deal with Tyson Fresh Meats, a US meat packing company, for 13,000 head of cattle that are China-ready and meet all the requirements, hopefully to be delivered in October.
“We are excited about doing business with you. We hope you are excited about doing business with one Montana ranch,” he told the Chinese participants.
As the ranch’s cattle beyond the backyard mooed away, Chinese and US participants discussed in depth ways to promote Montana beef and farm produce in China against the strong competition from Australia and Brazil, and also the possibility for joint venture investments in activities like beef processing.
Wearing a cowboy outfit, Cui said the visit brought back good memories of his five teenage years working in the farm fields of northeast China’s Heilongjiang province near the China-Russia border. “The people there are also very friendly, very courageous and hardworking, like the people in Montana here,” he said.
Daines dismissed the idea of a possible trade war between the US and China, the world’s two largest economies. “We all want to avoid a trade war. I tell you why,” he said, “because the people who get hurt in a trade war are Montana farmers and ranchers. They are the first affected by it.”
Cui noted that China is fully aware of President Donald Trump’s concern over US trade deficits with China. “If you could export more beef, more wheat, more barley, more Montana products including Montana hats and boots, the trade will be more balanced,” he said.