Any trade measures to try to reduce beef imports would hit China’s largest suppliers, Brazil, Argentina and Australia.

China’s total beef imports reached $14.2 billion (C$20.5 billion) in 2023, surging from $8.2 billion ($C11.8 billion) in 2019, customs data show. Brazil accounted for 42 per cent of the total trade value, followed by Argentina at 15 per cent and Australia at 12 per cent.

The inquiry will focus on fresh beef, cold beef, head of beef and frozen beef imported between Jan. 1, 2019 and June 30, 2024, the ministry said in a statement, adding that it followed an application by the China Animal Husbandry Association and other cattle and livestock groups.

The applicants said a sharp increase in import volumes over the period had “seriously damaged” China’s domestic industry, the ministry said.

Beef imports in 2023 were almost 65 per cent higher than in 2019, it said, with imports in the first half of 2024 more than double those in the first half of 2019.

The ministry said imports of the products under investigation accounted for 30.9 per cent of the Chinese market.

Meat prices in China, including pork, beef, and poultry have declined as shoppers, grappling with a slowing economy, buy less.

“Most beef cattle farms in China are in a loss-making situation,” the China Animal Husbandry Association was reported saying in a state media report. “The impact of a large amount of imported beef is undoubtedly adding insult to injury.”

The price of beef has fallen to its lowest level in the last five years, and the price of live cattle has fallen to the lowest in the last 10 years, the association said.

Average wholesale beef prices have declined 22 per cent to 59.82 yuan (C$11.81) a kilogram in late December from 77.18 yuan two years ago, agriculture ministry data showed.

The Brazilian government said in a statement that it will work over the coming months to demonstrate that the beef Brazil exports to China is “complementary” to Chinese beef output and does not harm the Asian country’s industry in any way.

“The Brazilian government reaffirms its commitment to defending the interests of Brazil’s agribusiness while respecting the sovereign decisions of our top trade partner,” it added.

Farmers asked to limit herds

Beijing in June sought to contain prices by asking farmers to limit and optimize the size of their beef cattle herd, but prices remain in decline amid a surge in imports, particularly from Argentina.

Beef imports from the South American producer during the first 11 months of 2024 rose 10 per cent from the same period in 2023 to 533,005 metric tons.

“The industry reflects that excessive beef imports have caused substantial damage to my country’s beef cattle industry,” China Animal Husbandry Association said in the report.

“The industry strongly calls on the country to take control measures on imported beef to protect farmers’ livelihoods and the industry’s security,” it said.

China imported 2.6 million tons of the targeted beef products between January and November. In calendar year 2019, China imported just 1.66 million tons.

The investigation is expected to conclude within eight months, although it could be extended in special circumstances. It is not targeted at specific countries or regions, does not distinguish the origin of products, and will not affect normal trade while under way, the commerce ministry said.

China is also considering trade restrictions on imports of dairy and pork from the European Union, although in those cases, the anti-dumping and anti-subsidy investigation are a tit-for-tat response against bloc’s tariff plan for China-made electric vehicles, analysts have said.

—Reporting by Ella Cao and Ryan Woo; Additional reporting by Lisandra Paraguassu in Brasilia.

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“Record average producer prices… drought conditions, and tight feed supply continued to put downward pressure on the cattle sector, and producers responded by sending breeding stock to feedlots,” StatCan said.

On January 1, Canadian farmers held 11.1 million cattle and calves on farms, down 2.1 per cent from a year prior, StatCan said in livestock estimates released today. It’s the smallest cattle herd since January 1, 1989.

Cattle producers kept less breeding stock, with year-over-year decreases in all categories. Producers held 0.7 per cent fewer feeder heifers, 0.2 per cent fewer steers and three per cent fewer calves compared with January 1, 2023.

Disposition of cattle was up almost one per cent compared with July to December 2022, StatCan said. Imports of cattle declined nearly 26 per cent to 153,400 head, and international exports increased 14 per cent to just over 389,000 head.

Average warm carcass weights have increased 18 per cent since 1999, offsetting decline in beef production, StatCan added.

A new report from Rabobank agreed that, despite declining numbers, cattle weights are supporting Canadian beef production.

“As drought continues across major cattle-producing areas, heifer placements were constant throughout the second and third quarter [of 2023],” the multinational bank said in its February North American Agribusiness Review.

“Placement weights are averaging 11lb [5 kg] more than last year and fed cattle marketing’s are down 4%, resulting in carcass weights trending higher,” it said.

A new high of 990 pounds (449 kg) was set late this January, it added. This is 17 pounds (8 kg) higher than the last record, set in 2022.

The U.S. cattle herd also reached multi-decade lows at the beginning of the year. Earlier this month, the USDA reported the lowest total head since 1951 at 87.2 million–down two per cent from the previous year on drought and feeding costs.

The American herd, however, may be bottoming out, Rabobank said.

It suggested herd stabilization is possible as forage availability and drought conditions are projected to improve.

In October, nearly 48 per cent of American beef cattle were in areas of moderate or worse drought, the report said. However, winter precipitation has benefited the cow-calf sector.

The same weather has caused poor pen conditions for feedlot operators, bringing potential reduced performance and carcass weight in the first half of the year.

In December, the USDA’s weekly carcass weights reached a record high of 942 pounds (427 kg), Rabobank reported. The most recent data is 30 pounds (13.6 kg) lower, the most aggressive percentage decline on record.

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Ranchers have slashed their herds as dry weather in the western U.S. reduced the land available for grazing and raised feeding costs, tightening cattle supplies and pushing up beef prices.

All cattle and calves totaled 87.2 million head at the start of 2024, down 2 per cent from a year earlier, the USDA said.

The number of beef cows was also down 2 per cent, at 28.2 million head, which was the lowest since 1961. A year ago, the beef cow herd hit its lowest level since 1962. Since then, the number of dairy cows eased 0.4 per cen to 9.4 million head.

Easing dryness could encourage ranchers to start rebuilding their beef herds later this year, analysts said. As of Jan. 23, 49 per cent of the nation’s cattle areas were considered abnormally dry, down from 72 per cent a year earlier, according to the U.S. Drought Monitor.

Analysts said producers in the fourth quarter may start to keep heifers, or young female cows, on farms to reproduce, instead of sending them to slaughter.

“We’re definitely looking at tighter supplies,” said Arlan Suderman, chief commodities economist for brokerage StoneX. “The question is: will demand be there?”

The U.S. has increased beef imports and reduced exports to compensate for the diminished herd. The USDA estimates beef imports reached 3.71 billion pounds in 2023, up 9.3 per cent from the previous year, and predicts they will rise to 3.77 billion pounds in 2024.

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Canada’s Trade Minister Mary Ng and Agriculture Minister Marie-Claude Bibeau announced the move Friday, saying Taiwan’s decision “will offer an opportunity to expand Canadian beef exports to Taiwan and diversify export markets in the Indo-Pacific region.”

“Expanding our trade relationships in the Indo-Pacific region is a top priority for the Government of Canada, and Taiwan presents many opportunities for Canada’s beef sector,” Bibeau said Friday in a release.

Ng had telegraphed Taiwan’s pending decision late last month during the Asia Pacific Economic Cooperation (APEC) trade ministers’ meeting in Detroit, noting ongoing negotiations between Canada and Taiwan on a foreign investment promotion and protection arrangement.

Taiwan, among many other countries, had blocked imports of Canadian beef in 2003 following the discovery of Canada’s first domestic case of bovine spongiform encephalopathy (BSE). It began accepting boneless Canadian beef from animals under age 30 months (UTMs) in 2007, though it paused those imports in 2015-16 on the discovery of Canada’s 19th BSE case, the first to be born after Canada’s “enhanced feed ban” was imposed in 2007.

The 30-month cutoff has been based on a safeguard imposed in Britain in the 1990s during that country’s BSE crisis. UTM cattle are believed to pose a lower risk of BSE infectivity even if those animals carry the agent that causes the disease.

Since then, however, Canada’s BSE-related beef safety cred has reached its highest possible ranking internationally. It was officially recognized in 2021 by the World Organization of Animal Health (WOAH) as having “negligible risk” status for BSE.

Canada last year was the seventh-largest supplier of beef and beef products to Taiwan, valued at almost $14 million out of Taiwan’s $1.9 billion total beef import market that year.

The Canadian Cattle Association said last month it’s “grateful for Taiwan’s decision to adhere to science-based trade,” noting the Indo-Pacific region “holds the greatest potential for beef export diversification.” — Glacier FarmMedia Network

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Canada’s federal agriculture department announced Monday that Japan has reopened to imports of “processed” Canadian beef — just days ahead of a significant reduction in Japan’s tariffs on imports of Canadian beef under the Trans-Pacific Partnership (CPTPP) trade pact.

“Our members view this as a critical market for their products, including processed beef and beef patties,” Chris White, CEO of the Canadian Meat Council, said in Agriculture and Agri-Food Canada’s release Monday.

“This agreement will allow our industry to further build on the recent successes they have enjoyed in Japan since the CPTPP was ratified.”

Nathan Phinney, president of the Canadian Cattle Association, said in a separate release Monday producers are “grateful for the re-opening for processed beef in Japan, our second largest export market for beef.”

Japan’s decision concludes another plot thread in the story of Canada’s BSE crisis. Japan had closed its ports entirely to Canadian beef in 2003, upon Canada’s first finding of a domestic cow with bovine spongiform encephalopathy (BSE). Canada in 2021 regained “negligible risk” status for BSE from the World Organization for Animal Health (OIE).

Japan reopened to imports of Canadian beef from cattle 20 months of age or younger in 2005, to beef from cattle 30 months or younger (UTMs) in 2013, and to beef from cattle over 30 months old (OTMs) in 2019.

Under the CPTPP — in force since the end of 2018 for Canada and Japan as well as Australia, Mexico, New Zealand and Singapore, as the first six of the 11 member countries to ratify that deal — Canada has since had preferential market access to Japan that has allowed it to build its eligible beef exports up to an amount the CCA pegged at $518 million in 2022.

Japan levies a 38.5 per cent tariff on beef imports, including on primary processed beef products. For Canada, however, the beef tariff has decreased since the CPTPP came into force and, starting Saturday (April 1), drops again to 23.35 per cent, en route down to nine per cent by 2033.

Tariffs on further-processed beef products “will be reduced even more and in some cases eliminated altogether,” AAFC said Monday, reiterating that the reduction “provides Canadian exporters with a clear tariff advantage over our key competitors.”

The value of beef in Japan has also increased, rising from $6.74 per kilogram in 2020 to $7.76/kg in 2022, the CCA said Monday.

Japan, and the larger Indo-Pacific region, “hold the greatest potential for beef export diversification” for Canada, the CCA added.

The federal government late last year launched its Indo-Pacific strategy, through which it says it plans to boost economic opportunities for Canada by strengthening partnerships in the region such as with Japan.

The strategy also calls for the establishment of Canada’s first dedicated agriculture and agri-food office in the region, at an as-yet unannounced location. — Glacier FarmMedia Network

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Brazil, the world’s largest beef exporter, suspended beef exports to its No. 1 customer China after confirming two cases of “atypical” mad cow disease in two separate domestic meat plants earlier this month.

The Russian watchdog and China’s customs administration signed a protocol on terms for checks, quarantine and requirements for veterinary certificates for Russian beef, Rosselkhoznadzor said.

Supplies of beef from Russia to China are small, with only two Russian producers at present allowed by Beijing to supply their product. Interfax news agency said Russia supplied 3,660 tonnes of beef to China in the first quarter of 2021.

Russia, a beef importer itself, banned certain cattle and beef imports from two Brazilian states after confirmation of the disease in the South American country.

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Singapore has approved the Canadian Food Inspection Agency’s certificate for exports of all Canadian beef, including beef offal, with no restrictions on the age of the cattle from which the beef was harvested.

Singapore’s decision, effective Friday (Aug. 20), makes it the first to remove BSE-related trade restrictions on beef that were held over from Canada’s previous “controlled risk” status.

Singapore had until now approved all Canadian boneless beef and bone-in beef from animals under 30 months of age (UTMs).

That said, Singapore hasn’t bought any Canadian beef since 2019, in which it took 1.79 tonnes, worth $31,000. Its biggest year for BSE-era beef imports from Canada was in 2014, when it took 53.77 tonnes, worth $586,000.

“While Singapore is not currently a large market for Canadian beef, (the Canadian Cattlemen’s Association) is pleased with the market access progress as diverse market access leads to trade resiliency and the highest overall value for Canadian farmers and ranchers,” CCA president Bob Lowe said in a release Tuesday announcing Singapore’s decision.

“We are encouraged by Singapore’s change and hope others will follow soon.”

Delegates to the World Organization for Animal Health (OIE) formally recognized Canada’s “negligible risk” status in late May, putting it on the same footing as beef-producing and -exporting nations such as the U.S., Australia, Argentina, Brazil, India, New Zealand, Mexico and Ireland.

The discovery of Canada’s first case of BSE in domestic cattle in May 2003 led many countries to halt and/or restrict imports of Canadian beef — decisions which are estimated to have led to losses of up to $5.5 billion for Canada’s beef cattle sector in the years 2003 to 2006 alone.

Canada achieved “controlled risk” status for BSE in 2007. To get to negligible-risk status, a country must show its last case of “classical” BSE was born more than 11 years ago and effective control measures and surveillance systems are in place.

The last of Canada’s 19 domestic BSE cases, discovered in 2015, was in a cow born in 2009.

A progressive, fatal disease of the nervous system in cattle, crudely called “mad cow disease,” BSE is in the family of transmissible spongiform encephalopathies (TSEs) such as scrapie in sheep, chronic wasting disease in deer and elk, and Creutzfeldt-Jakob disease in people.

No treatment or vaccine against BSE is yet available, and no method yet exists to confirm the BSE agent’s presence in live animals.

From a public health perspective, the deaths of about 230 people worldwide from a variant form of Creutzfeldt-Jakob disease (vCJD) are believed to be connected to consumption of contaminated beef from BSE-infected cattle.

According to Health Canada, no cases of vCJD have ever been linked to eating Canadian beef and BSE in Canada poses an “extremely low” risk to human health.

Most of Canada’s major beef export markets already approved all Canadian beef, based on their previous recognition of controlled-risk status.

However, the CCA said Tuesday, “several” key trading partners including China, Taiwan and South Korea haven’t yet done so.

Most of the remaining import bans are on Canada’s bone-in beef, offal and/or beef from animals over 30 months of age (OTMs), which are believed to be the highest-risk age group for development of BSE.

China, Russia and Peru, for examples, still accept Canadian bone-in beef only from UTMs, and boneless beef from OTMs. South Korea, Ukraine, Saudi Arabia and Egypt accept Canadian beef but only from UTMs. Indonesia accepts Canadian boneless beef from both UTMs and OTMs. — Glacier FarmMedia Network

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The suspension had been in effect since June 3 after a case was reported in a 17-year-old cow in the state of Mato Grosso. Cases of BSE (bovine spongiform encephalopathy) can arise spontaneously in cattle herds, usually in animals eight years old or older.

Tereza Cristina Dias, the agriculture minister, said on her Twitter account that Brazil would resume issuance of international health certificates to allow for beef exports to China.

Marfrig, whose shares jumped five per cent after the announcement of the end of the suspension, said in a securities filing that the government’s issuance of these certificates had been normalized on Thursday.

Shares of rival Minerva also rose three per cent in Sao Paulo.

China is the only country among Brazilian importers that enforces a health protocol requiring suspension of beef imports when an atypical case of BSE is reported, Brazil’s agriculture ministry said in a statement.

The ministry reiterated the Brazilian government’s intention to negotiate a new health protocol with Chinese authorities to address the issue.

— Reporting for Reuters by Ana Mano.

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The agreement reopens full beef trade after Japan in 2003 banned U.S. beef over concerns about bovine spongiform encephalopathy (BSE), which roiled the beef industry in the United States and elsewhere.

Japan restored partial access in 2005 for U.S. beef from cattle 20 months of age and younger, and extended access in 2013 to include beef from cattle less than 30 months of age.

“The Japanese news today was the catalyst to spark some short covering. Now we need to see some continuation,” said Dan Norcini, an independent livestock trader.

CME June live cattle futures settled up 0.8 cent at 111.275 cents/lb., turning higher after matching Thursday’s 8-1/2 month low of 109.05 cents (all figures US$). CME August live cattle finished up 0.975 cent at 108.925 cents.

USDA said Japan’s latest move could increase U.S. exports to Japan by up to $200 million annually. Japan bought about $2 billion worth of U.S. beef in 2018, the U.S. Meat Export Federation said.

Strength in live cattle futures was capped by lackluster cash cattle trade this week at mostly $115-$117/cwt, below the previous week’s trade, along with cool, wet U.S. weather that has curbed consumer demand for high-priced cuts of meat.

“We’ve got Memorial Day coming up, and that is normally the kick-off for the summer grilling season. We need some warm weather. Everybody is wondering, where has the spring demand been for beef? It just hasn’t showed up,” Norcini said.

Feeder cattle futures followed live cattle futures higher, shrugging off pressure from rising corn futures that signal higher feed costs. For the week, Chicago Board of Trade July corn surged 31-1/2 cents a bushel, or nearly nine per cent.

CME August feeder cattle settled on Friday up 2.175 cents at 145.5 cents/lb. and September feeder cattle ended up 2.475 cents at 146.7 cents.

Lean hog futures ended higher, rallying from early declines on news that the U.S. struck deals to lift tariffs on steel and aluminum imports from Canada and Mexico.

The agreements will also eliminate Mexican and Canadian retaliatory tariffs on a broad range of U.S. products, including pork and beef.

“The expectation is that you are going to see Mexican purchases ramp up considerably,” Norcini said.

CME June lean hog futures closed up 0.15 cent at 92.375 cents/lb. and July hogs rose 0.6 cent to settle at 93 cents.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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The Commission, which negotiates on behalf of the 28 EU nations, said it would open formal talks in the coming days on increasing the U.S. share of an existing 45,000-tonne quota. It concerns beef that has not been treated with certain growth hormones.

The Commission said it would do so in the coming days.

The beef issue is not part of EU-U.S. talks designed to improve transatlantic trade ties and remove tariffs on industrial goods following an agreement by U.S. President Donald Trump not to impose import duties on EU cars.

“Nevertheless, finding a mutually beneficial solution to our longstanding dispute over beef would be a major step forward in improving our trade cooperation,” the Council, which speaks on behalf of the EU’s members, said.

The dispute dates back to 1981 when the European Union banned the use of growth hormones in meat across the bloc, including imports, prompting a U.S. complaint at the World Trade Organization.

The EU and the U.S. eventually concluded an agreement in 2009 to grant a quota for hormone-free beef imports. However, under WTO rules, the quota also had to be made available to non-U.S. suppliers.

The U.S. share of that quota has slipped to less than 30 per cent in the year to the end of June, according to the U.S. Meat Export Federation (USMEF). Australia and Uruguay, and more recently Argentina, have steadily increased their shares.

The Commission may also need to negotiate with them to ensure that they accept lower shares of the quotas.

— Reporting for Reuters by Philip Blenkinsop.

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