As Chinese and U.S. representatives cut into a rib in Beijing on Friday to mark the return of U.S. beef to China after a 14-year absence, customers in Shanghai also started to receive the U.S. beef they had pre-ordered online via domestic retailers.
The beef sent to Shanghai homes via retailers like FruitDay is of the highest quality in terms of tenderness, juiciness, and flavor according to U.S. Department of Agriculture (USDA) standards, and is known as Prime grade.
The reopening of the Chinese market to U.S. beef, one of the first results from the China-United States 100-day action plan reached in May, ends a ban initially triggered by concerns over mad cow disease in 2003, and may well start a new chapter in bilateral economic and trade cooperation.
GROWING APPETITE
"My colleagues and I will get busier as U.S. beef is returning," said Lyu Ruiqing, head of Shenhong Cold Storage Company, as he inspected a refrigeration house in suburban Shanghai, where boxes of beef imported from Australia and some South American countries, as well as domestic beef are stored.
Lyu has been in the industry for over 30 years. U.S. beef used to be extremely popular in China, he recalled, accounting for as much as 70 percent of China's beef imports at its peak.
Driven by an ever-expanding middle class, China, the world's biggest pork consumer, is also a growing beef market fed by both domestic and foreign beef.
Data from China Customs showed that the country's beef imports reached around 2.5 billion U.S. dollars in 2016, compared to 254 million dollars in 2012. However, per capita consumption is still low compared to the United States and Australia.
"The market has great potential. Beef is increasingly popular among Chinese. In my restaurant, about 70 percent of the customers are local and many are young people," said Liu Xin, owner of a steakhouse in downtown Shanghai.
"Currently, we mainly serve dishes cooked with Australian beef, but we are ready to change the menu when U.S. beef is available this month," said Liu, who is planning to open another steakhouse in the city.
COMPETITION AT DINING TABLE
"In the last five years, China became the world's second largest beef importer. Australia has enjoyed exceptional opportunities in exporting beef to China. Competition started in 2015 when Brazil and Argentina were also granted market access," said Yan Hongwei, vice president of Shanghai Haibo Logistics, a major meat dealer in China.
It remains to be seen how U.S. beef will compete with products from the southern hemisphere.
"Flavor comes first," said Liu, the chef-turned-restaurant owner. Over the years, Chinese consumers have been accustomed to eating and cooking with Australian, Argentine or Brazilian beef, but American beef might be meatier and juicier, he said.
Price also matters, said Tao Jun, CEO of Sizzle Market, a chain store focusing on beef sales. He considered the return of American beef as good news as the price of imported beef may drop.
"Both Australian and American beef target the middle and high-end markets. Generally speaking, American beef is more cost-effective," said Tao, expecting that Australian dealers might try to make prices more competitive to avoid a market loss.
Seeing the great market potential, many Chinese companies are actively seeking cooperation with American beef dealers, while many beef processing plants in the United States are also very excited about the opportunities.
However, the picture is not fully painted yet.
