By Tom Polansek
CHICAGO (Reuters) – U.S. beef sales to China have taken a dive, U.S. government data showed on Thursday, after Beijing allowed the expiration of registrations that had permitted exports from hundreds of American meat facilities.
A tit-for-tat tariff dispute has also raised duties on U.S. meat and other goods shipped to China, making the products less attractive to Chinese buyers. The spat adds new strains to relations between the countries that had already reached historic lows in recent years.
China has not renewed export registrations for U.S. beef facilities that expired on March 16, though it updated registrations for pork and poultry plants, according to traders and the U.S. Meat Export Federation trade group.
As a result, U.S. exporters and Chinese buyers are reluctant to strike deals for American beef produced after that date due to uncertainty about whether it will be cleared for delivery, federation spokesperson Joe Schuele said.
“Nobody wants to put product at risk,” he said.
U.S. beef export sales to China in the week ended on March 20 were nearly nothing at 54 metric tons, according to U.S. Department of Agriculture data. Sales were also low, at 192 metric tons, in the previous week, as traders said uncertainty about the export registrations cooled business before they lapsed.
Previously, weekly sales were near or above 2,000 metric tons for four consecutive weeks from mid-February through early March, USDA data show.
The decline in Chinese demand is a blow to U.S. meatpackers such as Tyson Foods that are already paying high prices for cattle due to tight supplies.
“The packers are all concerned because obviously it’s a big market for U.S. beef,” said Altin Kalo, agricultural economist for Steiner Consulting Group. “It’s been two weeks now where we’re basically at zero.”
The USDA and the Meat Institute, an industry group representing U.S. meat processors, had no immediate comment.
China’s Commerce Ministry launched an investigation into surging beef imports late last year, as the world’s largest meat consumer grappled with an oversupplied market that hammered domestic beef prices. A hearing on the matter is slated for next week.
(Reporting by Tom Polansek; Editing by Rod Nickel)
