Top six beef exporter countries to China
As Nicaraguan beef begins to be exported to China, the number of countries from which mainland China imports beef reached a total of 17 in that month. Among them, the cumulative imports from the top six mainstream source countries—Brazil, Argentina, Uruguay, Australia, New Zealand, and the United States—totaled 207,000 tons, accounting for 92% of mainland China's total beef imports for the month, a decrease of 2 percentage points from the previous month. Among these six source countries, except for the United States, the beef import volumes from the other five countries all showed a downward trend compared to the previous month.
In April 2024, mainland China imported a total of 17,000 tons of beef from relatively niche source countries (excluding the top six mainstream source countries). Unlike the decline in imports from mainstream source countries, the import volume from these relatively niche countries increased significantly compared to the previous month, accounting for 8% of the total, an increase of two percentage points year-on-year.
Meanwhile, the import volumes from various niche source countries in April were generally higher than in the previous month. For example, the import volume from Bolivia increased by nearly 40% month-on-month, and the import volume from Ukraine doubled compared to the previous month.
Argentina Grain-Fed
Grain-fed beef emerges as a great opportunity for Argentine exporters.
A new business opportunity began to emerge for Argentine companies: grain-fed beef—of higher value—which until now was offered by Australia and the United States. These countries have increased their prices, and importers see Argentina as a good option for purchasing. As an example of this new grain-fed beef business, the compensated front quarter 5 cuts averaged around 5,500 dollars per ton.
Grain fed beef cattle spend 70 days minimum, often 100 days or more prior to processing, eating a mix of grain and plant based feed. Animals fed on grain for 300 days or more are destined for the top end of the market. They can be housed in purpose-built feed lots, where they can rest and sleep on beds of straw with shelter from the sun and rain. They can also be grain fed in open fields where they are free to roam. Argentina has some of the strictest animal welfare and environmental measures in place in regards to feed lots. The meat from grain fed beef cattle is considered by many to have better consistency of quality, be more tender and have better marbling. Many customers prefer grain fed beef, as the marbled fat has a clean white appearance and the meat has a juicy mouthfeel with a lovely, nutty flavour from the grain.
Grain-fed 5 cuts forequarter
The term "grain-fed 5 cuts forequarter" refers to specific cuts of beef taken from the forequarter (the front section) of grain-fed cattle. Here are the five primary cuts typically included:
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Chuck: This cut comes from the shoulder area. It’s known for its rich flavor and is typically used for pot roasts, stews, and ground beef due to its marbling and connective tissue.
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Brisket: This cut is taken from the breast or lower chest. It’s often used for slow-cooking methods such as braising or smoking, which break down its tough connective tissue and result in tender, flavorful meat.
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Rib: This section includes cuts like ribeye and prime rib. The rib area is known for its tenderness and marbling, making it a popular choice for grilling or roasting.
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Shank: Taken from the leg portion of the forequarter, shank cuts are typically used for braising or stewing. They are flavorful but can be tough if not cooked slowly.
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Plate: This is the lower portion of the cow, located just below the rib. It includes cuts such as short ribs and skirt steak. The plate is known for its rich flavor and is often used in dishes that require long cooking times to tenderize the meat.
These five cuts are valued for their distinct flavors and textures, making them versatile options for various cooking methods. The term "grain-fed" indicates that the cattle were fed a diet primarily consisting of grains, which typically results in more marbling and a richer flavor profile in the beef.
CHINA CONTINUES TO BE THE GREAT OPPORTUNITY FOR ARGENTINA BEEF
Six years ago, China emerged on the world stage to buy meat. Previously, it did not exist as a buyer of beef. Today, it is the major buyer, purchasing nearly 3 million tons annually, an astonishing amount, making it the primary demander. Of 100% of Argentina's exports, 78% go to China, which is risky, as it's never good to have such a concentrated market.
China had the opportunity to add value to meat that was previously discarded with phenomenal demand, but the first thing to understand is that the Chinese do not eat with cutlery; they eat with chopsticks, make a stew after three hours, which makes everything tender.
For producers, this has been a truly wonderful opportunity because what generally didn't have much value became significant. Today, for a producer, 40% of their income comes from the sale of cows, and if we look at it in kilograms, it's 50%, which is very important.
Today, China is paying $4,000 to $4,200 dollars for the forequarter, the part of the carcass, which is really very cheap compared to what China used to pay. Four and a half years ago, China was willing to pay up to $6,800 dollars per ton for the same cut. These are animals without significant muscle, so we are not sending an exceptional animal, as it doesn’t even have important muscle conformation. Today, we see an exceptional recovery in value for something that almost had no destination.
Can higher-value cuts be sent?
Should that be our future?
The first thing to tell people is that every year China adds 45 million people to its middle class, an entire country like Argentina. These people come from rural areas, move to urban areas, and become middle class. An entire Argentina per year, that’s what China is, so to speak.
All these people are changing their cultural habits, traveling, getting to know other cultures, and starting to demand different things.
Argentina
is a country that specializes in or is characterized by its quality, not quantity. Brazil is quantity, and Argentina is quality. If you want the best cuts, look for Argentina, and the world knows this, Europe knows it, everyone knows it. All of this goes to a channel called HORECA, which is a mix of hospitality, restaurants, parties, and events, and it is growing very strongly in China.
Timing and geographic challenges
Today, we reach these places very little, not because we can’t, but because others have been working there for a long time. The United States has been working there for a long time. Australia, which is very close in distance, is a major supplier, particularly to China, Korea, and Japan. They have the advantage of being only a few thousand kilometers away, while we have to go around the world to reach these places. A ship from Australia to China takes three or four days, while ours take 40 days. Therefore, we must focus on the fact that even a small effort from China that will creates phenomenal demand.
Date: May 29, 2024
Sial Shanghai 2024
More than 30 companies are accompanying the Argentine Beef Promotion Institute (IPCVA) at the most important food fair in the East, which begins on May 28 in Shanghai. This event is highly anticipated by Argentine manufacturers to see how it can help them and to advance in improving trading between both countries.
The People's Republic of China presents new challenges and a big question mark for exporters regarding prices that have never returned to the values obtained when China was affected by African swine fever.
The market has been depreciated for more than a year and has been experiencing low values. However, expectations remain optimistic, despite the market remaining stable to declining, with small moments of recovery. China is purchasing usual volumes, but Argentina finds it difficult to understand the price level. This year started with increasing volumes, but the business reality is causing Argentine manufacturers to reduce the volumes they produce and export.
Some beef manufacturers claim that Argentina is a strong player in China, producing increasingly higher quality cuts and developing sales of grass-fed and grain-fed cuts. Customers appreciate Argentine products, and we have high preferences for compliance, quality, and quantity over other exporting countries. China is not expected to see a major retraction. Argentine producers are confident that the market will start to recover at some point, along with the Chinese economy.
Meanwhile, other manufacturers say this year is very tough in terms of prices and integrations, but fortunately, China remains firm in its purchases and needs. Our expectation is to strengthen our position in the quality market and to get to know new clients in the premium segment who seek to purchase more cuts and achieve better prices.
Argentine manufacturers need to focus on listening to customers. In recent months, we have experienced a trend of depressed values, underscoring the importance of deeply understanding the current market context. This will allow us to make strategic decisions, optimizing our operations in a challenging market. China is a giant market with many possibilities.
For participation in Sial China, the IPCVA will develop a gigantic Argentine Beef Pavilion, covering 1,150 square meters – the largest in the Institute's history – in which 31 exporting companies will participate.
Between January and March 2024, Argentine beef exports to China totaled 152,055 tons worth over 435 million dollars. Throughout 2023, sales amounted to 528,618 tons worth 1.648 billion dollars.
Date: May 27, 2024
Chinese Market Weekly
In the imported beef inventory market this week, downstream buyers continued their routine purchases as needed, and overall market transactions remained relatively stable. In general, the market demand lacks upward drivers, while supply remains strong, leading many participants to have a pessimistic outlook for the future. During the week, bulk purchase demand was low, and counter-offers did not meet the expectations of stockholders. On the supply side, cost pressures made price reductions difficult, leading suppliers to adopt a wait-and-see approach regarding lowering prices. In this stalemate, the market's transaction volume struggled to increase.
Prices:
On one hand, the market continues to face significant pressure on inventory beef prices due to strong supply and weak demand. On the other hand, prices are also supported by costs. In this tug-of-war between supply and demand, inventory prices this week remained generally weak and stable. This week, the mainstream price of Brazilian inventory goods stabilized, with some lower-priced items seeing a decline. For example, the price for the Forequarter 8-piece set was mostly between 38-40 yuan/kg, with the mainstream price stable at 38.5 yuan/kg, and some quotes appeared between 37.5-38 yuan/kg towards the end of the week. The price for Brazilian flat 97VL remained concentrated at 46-48 yuan/kg, with the mainstream price stable at 47 yuan/kg.
Differences Between the Forequarter of Brazilian Beef and Argentine Beef:
There are differences between the forequarter of Brazilian beef and Argentine beef in several aspects:
1. Breeding Methods and Environment:
- Brazil: In Brazil, cattle are primarily grazed on tropical and subtropical grasslands. The breeding method mainly involves grazing, resulting in beef with a richer flavor and firmer texture.
- Argentina: In Argentina, cattle are mostly grazed on temperate grasslands, especially the famous Pampas grasslands. The breeding method also mainly involves grazing, but the vegetation and climatic conditions of the grasslands lead to more evenly distributed fat and more tender meat.
2. Meat Quality and Flavor:
- Brazilian Beef: Due to the grazing environment and breeding methods, Brazilian beef typically has a stronger flavor and firmer texture. However, the high level of physical activity can sometimes make the meat tougher.
- Argentine Beef: Argentine beef, owing to the unique vegetation and breeding conditions of the grasslands, has evenly distributed fat, tender meat, and a milder flavor, making it generally better suited for grilling (such as Argentine asado).
3. Cuts and Cutting Methods:
- Brazil: The cutting method for Brazilian beef is usually more rugged, with larger pieces that are suitable for grilling and stewing. Common forequarter cuts include chuck and neck.
- Argentina: The cutting method for Argentine beef is more refined, focusing on uniformity and suitability of the cuts. Forequarter cuts such as shoulder and rib cuts are commonly used for Argentine-style grilling (asado).
4. Market and Price:
- Brazil: Brazil is one of the largest beef exporters in the world, with relatively lower prices, making its beef highly competitive in the market.
- Argentina: Argentine beef is renowned in the international market for its high quality and unique flavor, but it is also relatively more expensive.
Overall, while both Brazilian and Argentine beef forequarters are of high quality, there are differences in terms of meat quality, flavor, cutting methods, and market positioning. Consumers can choose based on their taste preferences and cooking needs.
Date: May 26, 2024
China Beef Market Prices
China today's imported beef spot market transaction atmosphere is not good, prices continue without major change.
In the Chinese imported beef market, the purchasing performance of retail and wholesale demanders is still weak today. The overall wait and see is the most common situation in the country, and the level of counter-offers continues as last week situation. Amid the stalemate between supply and demand, the inventories transactions continued to run weakly with low trading volume.
In terms of price, the prices of Brazil's forequarter set were pushed by some international trader. It showed a slight increase today. Among them, the forequarter set of 8-piece set increased by 0.2 ¥/kg compared with last Friday to 38.5 ¥/kg, and the overall price is between 38-40 ¥/kg.
Rest of the prices on the market basically did not change and continued to remain stable overall. Judging from the mainstream prices, such as Brazilian Flank 80VL 32.5 ¥/kg, Brisket 33.5 ¥/kg, Bolar Blade 38.5 ¥/kg, Flat 97VL 47 ¥/kg; Argentinian 6 cuts 38.5 ¥/kg, forequarter 37 ¥/kg, Flat 97VL 46 ¥/kg: Uruguay bone-in front chest 24 ¥/kg. are the same as last Friday. Reported on May.20.2024.
China the first customer of US agriculture
The US Department of Agriculture (USDA) published a report showing that in 2023, US agroindustrial exports to China reached $29,076 million.
Although this is a figure much lower than the historical record of 38,114 million dollars achieved in 2022, the truth is that the document shows the enormous level of dependence on China that US agriculture has, something that, in the current geopolitical situation, can represent a major risk factor for farmers.
In fact, last year China was the largest destination for US agro-industrial exports with shipments that represented 16.6% of the total of 174,872 million dollars. Behind were Mexico (28,640 million), Canada (28,169 million), the European Union (12,765 million) and Japan (11,910 million).
Soybeans are, due to business volume, the most critical issue, since more than half of the beans are sent to China and there is no other market that can replace the Asian nation.
If existing tensions between the US and China over Taiwan – a territory that Xi Jinping's government considers its own, but which is supported by the US – flare at some point, China's first objective with the US. In retaliation, it will surely be soybeans.
And that is not a far-fetched hypothesis, because it has already happened in the recent past. At the beginning of July 2018 – remember – China began to apply an additional 25% tariff on US soybeans (among many other products) in retaliation for the imposition of equivalent tariffs by the US on a set of products. Chinese industrialists. Due to the characteristics of the global soybean market, this implied a kind of “retention” or discount of the FOB value of US soybeans (Gulf of Mexico), which reached a historical record of 90 US$/ton in September that year regarding Brazilian soybeans (Paranaguá).
Last year, US corn exports to China were $1.655 billion. In this case, the Asian nation represented 12.5% of the global business, an important customer, but not critical, given that most of the cereal goes to Mexico (almost captive customer) and Japan.
This is not the case with cotton, where China represented 26.0% of total US sales made last year with 1,552 million dollars out of a total of 5,976 million. The second client, Pakistan, represented 13.5%, that is, almost half of what China took.
Last year, China was also the second US customer in nuts with imports for 1,186 million dollars out of a total of 8,822 million, which represents 23.4% of the total.
Regarding external sales of beef, last year shipments destined for China totaled 1,606 million dollars, a figure equivalent to 16.1% of the total. It is the third US customer behind Korea and Japan.
A similar relationship exists in the case of pork sales, where China in 2023 imported the product from the US for 1,241 million dollars, a figure equivalent to 15.2% of the total for the period. Regarding poultry products, the proportion was 13.4% with Chinese purchases for 736 million dollars last year. May.20.2024
Mainland China’s monthly beef import volume and average import price trend from Argentina
In March 2024, Mainland China Imported beef was 55,000 tons, an increase of more than 7,000 tons year-on-month, or about 16%. This import volume ranks third in mainland China's monthly beef imports from Argentina, second only to the import levels in January 2021 and January 2024.
The average price of beef imports from Argentina in March was US$3,857/ton.
Looking at the first quarter as a whole, mainland China’s beef imports from Argentina in 2024 will be lower than last year.
There was a significant rebound in the same period last year, rising from 123,000 tons in the first quarter of 2023 to 158,000 tons, a year-on-year increase of 28%, setting a new high for imports in the same period; accounting for 20% of mainland China's total beef imports during the same period, a slight year-on-year increase expand. In the first quarter, the average price of beef imports from Argentina to mainland China was US$3,899/ton, a year-on-year decrease of US$293/ton.
