The USA has agreed a multi-million dollar deal with the Chinese, to export high quantities of Montana beef to the Asian country, as reported by the Washington Post.
One of China’s largest online retailers, JD.com, have signed the deal with the Montana Stockgrowers Association. They agreed in principle to purchase $200 million worth of the US beef over the course of the next three years. This is estimated to represent as much as 90,000 cattle, which makes up approximately 4% of the state's annual cattle sales.
The company also aims to build a multi-million dollar slaughterhouse in Montana, estimated to cost over $100 million. This was included as part of the trade deal, first announced on Wednesday.
The deal has been lauded by the livestock industry in Montana, who say is a big step in attempting to break into the ever-growing Chinese markets. The said the inclusion of a new slaughterhouse in the deal, would only ensure traceability. This is, of course, a requirement under new import rules into China.
JD.com, as part of the deal, agreed to buy at least $50m worth of beef next year, followed by $70millions worth in 2019 and a whopping $80millions worth in 2020. The beef will all come from members of the Montana Stockgrowers organisation and purchased at market value
Construction on the slaughterhouse will not begin until next Summer with a site yet to be chosen. Kori Anderson, spokesperson for Stockgrowers Montana, confirmed this and said the deal will open many doors for Montana’s producers.
“That’s too quick of a timeline for all the things that need to be in place...We’re really looking for the end game here and the long-term potential that we can build upon. This would definitely open a lot of doors for Montana producers.” she said.
Warnings have come from R-Calf USA chief executive, Bill Bullard, that the deal may be of little benefit to many members. He said that usually cattle are not sold in the area based on market prices, but by competitive bidding.
“They’re not adding to competition. As a matter of fact, that’s suppressing competition,” Bullard said.
China are currently the third largest export market for the US, with the country lifting its ban on American beef months ago. It is estimated that Chinese residents have eaten approximately 8bn kgs of beef this year, making this market a very lucrative one.
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