COLLEGE STATION, TEXAS (RFD NEWS) — The U.S. beef sector is nearing one year without full access to the Chinese market, creating ongoing challenges for exporters as they work to redirect product and maintain global demand.
According to Erin Borror with the U.S. Meat Export Federation (USMEF), the situation stems largely from regulatory issues tied to the plant registration system managed by China Customs Administration (GAC) and the USDA Food Safety and Inspection Service.
Borror says the U.S. gained preferential access to the Chinese market under the U.S.-China Phase One Trade Agreement, which allowed dozens of American processing facilities to export beef. However, an unexpected five-year expiration in China’s facility registration system led to the suspension of many plants in March, effectively shutting off most U.S. shipments.
She says only a handful of American plants remain eligible to export, while roughly 30 facilities are currently suspended, including several of the largest U.S. beef processors. Even if diplomatic efforts reopen the market broadly, Borror warns that additional regulatory hurdles—such as residue compliance issues and plant relisting requirements—could still limit exports.
Meanwhile, broader geopolitical tensions in the Middle East are also creating volatility across agricultural markets. Since the war with Iran began, commodities ranging from grains to equities have experienced significant price swings, and cattle markets could also be affected.
Texas A&M Economist: Global Conflict Adds Uncertainty to Cattle Market Outlook
Volatility has returned to the cattle markets as geopolitical tensions rise following the war involving Iran. While grain markets have already seen significant price swings, livestock markets are also watching closely for economic ripple effects. Dr. David Anderson with Texas A&M University AgriLife Extension joined us on Thursday’s Market Day Report to explain how instability in the Persian Gulf can influence cattle markets.
In his interview with RFD NEWS, Anderson says when geopolitical tensions escalate, analysts often watch energy prices, export demand, and transportation costs as early indicators of potential impacts on cattle markets. Instability around the Persian Gulf can affect shipping routes and raise freight or insurance costs for beef exports headed to the region.
Anderson says futures markets are often the first indicator of uncertainty. He explained that sudden geopolitical events can quickly reverse that trend.
“Well, I think we get our first indicator right off the bat in what we see in the futures market,” Anderson said. “With very high cattle prices in the cash market, we’ve certainly seen over the last year or so that it has taken a while for the futures market to catch up to cash An event happens, and we see this big decline in the futures, and that’s certainly what we’ve seen over the last week since this war started. It’s another event adding volatility to the market.”
According to Anderson, falling futures prices often reflect concerns about the broader economy rather than cattle fundamentals alone.
“When we think about the cattle market on the futures side, why does it go down in a case like this?” he said. “It’s an expectation — what does this mean for incomes, for the growth of the economy, and therefore for consumer demand?”
Despite the uncertainty, the latest weekly export sales report showed strong demand for U.S. beef. However, Anderson noted that direct impacts from the conflict may be limited because the United States’ largest export markets are elsewhere.
“If you think about it, our big five customers for beef exports are Canada, Mexico, Japan, and South Korea,” Anderson said. “In the last few years, China has become a very big market, but over the last year, with tariffs, retaliatory tariffs, and the pulling of export licenses, that has really declined to very little.”
The majority of U.S. beef exports, he added, go to countries far from the conflict zone.
“Those big four markets are really right here in our own backyard with Canada and Mexico, and then Japan and South Korea,” Anderson said. “We ship beef to dozens of countries around the world, but our biggest markets won’t be going very close to those regions where the direct fighting is taking place.”
Still, indirect costs tied to global instability could affect producers.
“You find a new route, but fuel costs to ship are one that comes to my mind right off the bat,” Anderson said. He also noted that higher energy costs could eventually affect ranchers and cattle feeders by raising input costs. “We’re all sort of in the same boat on this. We all use fuel — diesel, gasoline — and for many cattle producers, especially in the eastern half of the country, where improved pastures require fertilizing, those operations will face rising costs.”
Higher production costs in crop agriculture could also filter into livestock production later.
“If rising production costs affect the number of corn acres planted, yields, or overall production, then we could see higher prices there,” he said. “That would come later down the line in terms of feed costs.”
Feed Grain Markets Supported by Strong Export Demand
Strong export demand and generally favorable global crop conditions are helping support feed grain markets as spring approaches, according to Anderson’s colleague and fellow economist, Dr. Mark Welch with Texas A&M AgriLife Extension.
Globally, crop monitoring shows mostly favorable conditions for in-season corn production, though Argentina remains at risk from drought, and Mexico experienced excessive early-season rainfall. In the United States, corn export sales are running at a historically strong pace toward the record 3.3-billion-bushel marketing-year target, with commitments already well ahead of the typical seasonal pace.
For producers, improving export demand continues to support prices, with sorghum sales strengthening after China reopened its market late last fall. Texas cash grain markets also reflect firmer conditions, with recent averages near $4.75 per bushel for corn and $3.90 per bushel for sorghum, while wheat trades near $4.97 per bushel.
Regionally, feed grain marketing remains tied to broader outside markets. Welch notes rising oil prices tied to Middle East tensions are fueling inflation concerns, while recent employment data show weaker job growth and continued economic uncertainty ahead of the Federal Reserve’s next policy meeting.
Looking ahead, Welch emphasizes that seasonality remains key to corn marketing decisions, with historically stronger pricing prospects in the first half of the year and weaker seasonal trends by late summer and early fall.
