China has recently ended some of its most severe restrictions in a move away from the country?s ?Zero-COVID? policy. The moves should open new opportunities for U.S. red meat as restaurant and food retail eventually rebound. However, Joel Haggard, U.S. Meat Export Federation vice president for the Asia-Pacific, said it will initially be a bumpy ride as a COVID wave moves through the country.
?What is interesting about this whole thing is that this dismantling has taken place at a time of a huge new surge in COVID cases,? Haggard said. ?I think everyone was kind of expecting that because of this naive immunity that the population had, a very small percentage of the population have had COVID, so this is their first real wave. So overall, the direction is positive, but it’s going to be bumpy over the next couple of months. We can already see that in cities like Beijing and Wong Jo, probably within a couple of weeks, they will have hit a peak. And so how this plays out to the economies is still very difficult to predict. One factor that probably will supercharge the wave is the vast internal population movements that happen before the Chinese New Year.?
China has had a low infection rate, meaning lower levels of natural immunity than other countries. Regardless, Haggard said Chinese residents are anxious to travel and go out to restaurants as soon as they feel safe.
?U.S. beef exports to China have been stellar so far this year,? Haggard said. ?This is going to be a record year. We are aware that inventories have been building of all imported beef. It’s because of the poor retail environment over the last couple of months. And things are still uncertain as I as I mentioned before, but I think there’s optimism about next year, simply because many of these restrictions are being lifted. There’s a good chance that international travel will resume, maybe quarantine free, maybe in the early part of the year. Just think of the hotel business which has really been cratered by COVID. The vision of that coming back is there now with this dismantling of the COVID regulation. So, bumpy in the short to medium term optimistic in the longer term.?
Through October, U.S. beef export value to China is up 50% from the previous year to just under $2 billion. Pork exports to China are lower year-over-year but have regained momentum in the second half of 2022. For more information, visit usmef.org.
