By Karen Braun
NAPERVILLE, Illinois- US agricultural exporters have seen a marked decline in business to China over the past year or so as trade tensions simmer, and Brazil’s increasing ability to supply product has not helped the US cause.
But now Brazil is looking to beef up – literally – its agricultural trade ties with China and capitalize on potential tariff escalations between the United States and China once President-elect Donald Trump begins his second term in January.
Brazil Agriculture Minister Carlos Favaro said on Monday that farm agreements with China would be announced on Wednesday ahead of meetings with Chinese President Xi Jinping on the sidelines of the G20 summit in Brazil.
Favaro told Brazilian media last week that Brazil would seize the opportunity if Trump clashes with China, as he did in his first term, effectively putting US exporters on notice.
Depending on the nature of Wednesday’s unveiling, it could deliver a blow to US producers and be a boon to Brazilian ones as China is both countries’ biggest agricultural trade partner.
The deals are expected to focus on fruit, beef and pork, and they could likely expand the number of approved Brazilian meatpackers for exports to China. No further details have been offered.
Brazil and the United States are the world’s leading meat suppliers and China is a primary destination. The US Department of Agriculture projects that in 2025, China will account for 18 percent of global beef, pork and chicken meat imports while 48 percent of total meat exports will come from the United States or Brazil.
Brazil has incentive to shore up business ties with China especially related to beef because as with soybeans, China is overwhelmingly Brazil’s top beef destination. US beef customers are comparably more diversified, which is usually advantageous.
Things looked promising for US beef producers a few years ago when China burst into their market, but exports to China in the first nine months of 2024 were a four-year low for the period.
Meanwhile, China’s 2024 beef imports are projected to be record high and Brazil’s year-to-date beef shipments to the Asian giant are also at all-time highs.
A decline in US beef production has contributed to lower exports, but China’s overall share of US exports has also fallen versus the prior two years, yet another example of how US agriculture is being increasingly edged out of China in favor of Brazil.
Wednesday’s announcement may not offer a huge shakeup. Hailed as a historic move, China back in March cleared an additional 38 Brazilian meat exporters, bringing the total to 144. Shipments have not significantly increased since then, but some of this is explainable, such as China’s pullback in overall pork imports this year. – Reuters
