If Not China, Then Where?

Written by: Gina Tumbarello   |   September 16, 2019

China, Trade

The U.S. animal food industry hasn’t faced the same level of backlash as other industries and those within the agricultural sector because of the current U.S.-China tariff war, mainly because it has barely had access to the Chinese market in the first place.

Our industry faces a number of challenges in this market. No new U.S. feed additive and premix products have been able to be exported to China since 2011 due to a facility registration requirement China has in place, but does not have a mechanism for compliance. On top of that, China continues to ban U.S. feed products with ruminant-origin ingredients and a number of poultry-derived ingredients.

Much like other industries that deal with novel products and technologies, the animal food industry is further limited through the cumbersome product registration process, which is invasive and oftentimes requires divulging very detailed, confidential information. For example, one of our members said:

“As we have always been cautious in China and limited our exposure, our biggest hurdle has been registrations and the exposure of the technical side of how we produce our products. Basically, for us the exposure of our technology rarely leads to a registered product.”

While the ongoing tariff war has resulted in Chinese manufacturers and consumers paying more for U.S. animal food products, albeit on the limited number of products that we are able to export successfully, there is a potential upside for our industry. We are now able to challenge China’s restrictive policies through channels that have never before existed – through the high-level negotiations between the two governments.

What better time to bring these issues to light than when the U.S. government is yearning to address a whole slew of China’s unfair trading practices?

Because the reality is, China is a prime market for U.S. animal food products. China is the largest feed market in the world and is one of the fastest growing. The demand is there because the Asian country is one of the world’s leading producers of animal protein (prior to the introduction of African swine fever in 2018), with meat output totaling 88.2 million metric tons (MMT).

However, the flip side of the coin is that we are at the mercy of two strong, competing countries that are looking to negotiate their differences. Our hope as an industry is that we come out of it relatively unscathed, or at least, no worse off that when the tariff war and negotiations started.

So the question remains: at what point does the U.S. animal food industry move on from China? Can it afford such a move? Are we missing opportunities in other potential markets due to the continued struggle for entrance into China?

This is something AFIA’s International Trade Committee is working to answer and I welcome any thoughts. I encourage you to read more about some of our regulatory challenges with China on our website.