Arkansas Ranchers Celebrate Reopening of Large, Lucrative Chinese Market
At the ranch on County Road 766 in Jonesboro, a pretty silvery-white calf born just three days earlier was happily playing and running around on a field. He’s one of the newest members of Arkansas’s collective herd, population 1.75 million.
“The last bull we bought cost $3,600, and he’s a good bull, but probably the next one we buy will be higher than that. You have to look for traits that will improve the calves that you already have,” said rancher Eric Grant.
There’s a dent in the fence from when a massive bull tried to hurl himself through it to get to a cow. The bull seems to have an uncanny sense for when a cow is in heat even several fields away, Grant said.
Arkansas is not the top cattle producing state. That title belongs to Texas, but Arkansas fares well for beef.
“We’re above average,” said Travis Justice, an economist with the Arkansas Farm Bureau. He said Arkansas ranks 17th among states for overall cattle inventory but 12th for beef cows.
“It’s the most diverse and widespread commodity produced in the state,” he said, describing the more than 25,000 farms across Arkansas that raise cattle, either primarily or as a secondary or tertiary use of land resources. Those herds vary greatly in size. Cattle represent the fourth largest agricultural export in Arkansas, behind rice, poultry and soybeans.
Many of Arkansas’s ranchers are celebrating the reopening of the beef market in China. The reopening was announced this summer, following a two-day summit on trade and other issues between President Trump and Chinese President Xi Jinping at Trump’s Mar-a-Lago estate in Florida.
It’s been so long since China allowed U.S. beef sale "it’s basically a new market,” said Justice. He said if Arkansas is able to restore its Chinese market to pre-ban levels, it might eventually add $20 to $40 per head to the value of its cattle.
The market closed on December 23, 2003 after a cow that had recently given birth to an unusually large calf became paralyzed and was tested for diseases. She was found to have bovine spongiform encephalopathy, more commonly known as Mad Cow Disease, although some question the accuracy of such tests.
The cow became known as “the cow that stole Christmas,” and she ended up stealing a number of Christmases, since the ban extended for nearly 14 years, far longer than analysts had anticipated.
Experts say the reopening of the market in the world’s most populated country could be worth hundreds of millions of dollars.
“The middle class is growing. The upper class is growing,” Arkansas State University Animal Sciences Professor David Newman said of China’s population, estimated at 1.4 billion. “When you start to see a rise in per-capita income per person, the very first thing they do is eat better, and more specifically, they buy proteins.”
“We would be crazy to not try to go after those consumers,” said Kent Bacus, Director of International Trade and Market Access for the National Cattlemen’s Beef Association.
Bacus said beef has become trendy and a status symbol among Chinese consumers, and they are willing to spend on higher-end cuts.
“What they like is the quality of the product that we send,” he said.
Newman said Arkansas is well-positioned to sell beef to China again, although he said it might take quite a while before operations are up and running and profits are being realized.
He said China has stricter requirements, and will not allow beef from herds that have been given certain synthetic growth hormones or beta agonists, even though they are commonly accepted in the U.S. and other countries.
Typically, Arkansas ranchers sell their animals at livestock auctions or to a production center that also handles the export process once the animal has been harvested.
Due to the huge demand expected from China, all ranchers may be able to sell their beef for more money.
“If we have more pull on fresh beef into China, it’ll create more pull all the way through the value chain,” Newman said.
Joe Schuele, vice president of communications with the U.S. Meat Export Federation, said the re-opening of the Chinese market will have a spillover effect in the rest of Asia and help drive up prices received by U.S. ranchers for popular cuts, such as short ribs, short plate or chuck roll.
“Those are cuts that tend to command a premium in Asia,” he noted.
At a recent meeting with farmers in Mississippi County over the controversial use of dicamba, Gov. Asa Hutchinson said he was excited for ranchers about their new financial prospects from the reopening of the Chinese market.
“There’s a bit of optimism in the industry that was not there before,” said Justice.
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