MAUDLOW — It's going to take some sizzle to sell Montana steaks in China, the nation's ambassador to the United States told ranchers and farmers Friday.
At a meeting organized by U.S. Sen. Steve Daines, Ambassador Cui Tiankai spoke frankly about what it will take to sell Montana beef in China, the world's second largest beef consuming nation. In June, China lifted a 13-year ban on U.S. beef. The ban stemmed from a 2003 case of bovine spongiform encephalopathy, better known as mad cow disease.
Ranchers have watched with their noses pressed up against the glass as Chinese restaurants and supermarkets served up increasing amounts of beef from other countries. China imported 825,000 tons of beef in 2016.
Daines, and before him former U.S. Sen. Max Baucus, have spent years pressuring China to admit U.S. beef once again. It was shortly after Daines traveled to China in April to meet with officials there when China announced it would normalize U.S. beef trade within a couple months.
The ambassador said Montana is going to have to promote its beef to Chinese consumers to get in the game. U.S. beef is high quality, but expensive, Cui said.
"American beef could be relatively expensive on the Chinese market," Cui said. "More expensive than the local beef or even beef from Australia and New Zealand. But still, you do have a huge group of potential consumers there.
"We know the importance of a college entrance exam in China. It's very competitive. So, whenever a kid succeeded on such an exam, the parents, the grandparents, who love him or her, would treat him to something like American beef. Also, when people are dating each other, I would think the boys would show their love to the girl, if they could invite the girl to have some American beef. And also for weddings for some special event. This is in addition to all the five- or four-star hotels in China."
The market would be exclusive, but still large, said Cui, whose anecdotes brought some laughter to the discussion, broken up only by the bellering of the cattle on Craig Morgan Ranch. The morning had started with a horseback trip into the northwestern foothills of the Bridger Mountains where black Angus grazed on late-summer grass surrendering its last inches of green to a brutal drought.
The air was Beijing grey with smoke from Montana's million-acre wildfire season.
"I didn't realize I had such an important part to play in China without beef," Daines said. "It's very strategic."
U.S. beef would be bought regularly only by affluent Chinese unconcerned about price, Cui said. Members of the Montana Stockgrowers Association, Montana Grain Growers and Montana Farm Bureau took notice.
Cui is familiar with China's high-end beef market. He was China's ambassador to Japan for two years and witnessed the Japanese marketing of Kobe beef in China. Marbled throughout with fat that melts on the grill, Kobe steaks are marketed as the world's best. Cui credited the beef's success to a good story, bordering on myth.
Marketing Montana beef won't be easy. U.S. Beef Promotions in foreign markets are managed by the U.S. Meat Export Federation, which relies on beef checkoff dollars collected from ranchers whenever ranch cattle are sold. Because the money comes from ranchers in every state, USMEF doesn't promote one state's beef exclusively.
Montana will likely have to fund and craft its own beef marketing program, attendees said.
The are bigger hurdles, namely the way cattle from ranches across the United States are funneled into a small number of large packing plants.
Montana ships about 900,000 calves a year into a concentrated network of feedlots and packing plants. Coming out the other end, there's no effort to brand the beef as originating from a particular state.
Daines, Montana's lone representative on the Senate Agriculture Committee, said it's important to get Montana agriculture products into China.
"If we're going to grow our economy in Montana, we need to grow our agriculture community, our agriculture economy," Daines said. "China is the second largest beef import market in the world. This a tremendous opportunity for Montana agriculture to continue to expand herds and grow business. We talked today about sugar beets, about barley, about wheat, about beef. These are great opportunities for the future."
Ranchers like Fred Wacker, of Miles City, would like to see Montana break away from the processing herd by butchering its own beef and selling it under the Montana brand. Wacker was all ears as Cui suggested that acquiring Chinese investors would give Montana beef a leg up in China.
"We have the land, we have the cattle, we have the quality, we have the water," Wacker said. "We have the interest in putting in a major processing plant here, and we also have a very high-quality product."
Montana's agriculture community is no stranger to foreign investment. Most of the grain elevators in the state are are owned by Japanese companies determined to secure supply and control quality of U.S. wheat.
The Chinese are already investing in Montana, to tune of $17 million, Cui said. Beijing-based Goldwind, the world's second-largest manufacturer of wind turbines, built a 14-turbine wind farm near Shawmut in 2012. The turbines are made in China. The wind farm will supply electricity to NorthWestern Energy into the 2030s.
"When export of Montana beef to China is more or less stabilized, and channels are established, we could find your main buyers in China, Chinese companies that import a lot of Montana beef," Cui said. "And maybe with the help of some Chinese banks, like China Bank in New York, they could invest in the infrastructure here, insure a stable and long-lasting supply."
Wacker raises antibiotic-free, implant-free Angus cattle for Whole Foods. It's the kind of beef free of the hormones and pharmaceuticals China has balked at when setting terms for U.S. beef. Most ranchers in Montana can meet those standards now, he said, but when he's called meat packers inquiring about when they might market beef in China, there's no plan yet.
Wacker was pushing for market access to China loud enough that Daines contacted the Miles City rancher in April to see if he would offer up a few steaks for the Republican lawmaker's trip to China. Wacker obliged, and Daines showed up with a small Coleman cooler of Montana beef, using his official Senate trip to avoid customs. China Premier Li Keqiang accepted the steaks without protest.
Ambassador Cui and his cadre of emissaries were expected to stay in Montana for a steak dinner and complete it with Montana craft beer — Montana Grain Growers were courting barley sales Friday.
Saturday, the visitors will head to Yellowstone Park as Daines tries to sell them on Montana tourism.
After the business discussion, Cui and Daines both addressed China-U.S. trade relations in the context of the North Korea missile crisis. The question was posed by The Gazette after Cui had remarked that there should be no trade war, or any war, between China and the United States.
"The situation on the Korean Peninsula, particularly the Korean nuclear issue, is a common challenge for both our countries, and we've been working together on this issue for so many years," Cui said. "I'm quite confident we're going to work together on this issue in the years or months to come. And our two presidents have kept very close contact on this particular issue, and they're giving us very clear guidance on where we should work together, too. But I don't think this issue is so directly related to trade issue."
Last week, after North Korea declared that it had successfully tested a hydrogen bomb, President Donald Trump tweeted out that he was considering a trade embargo on countries doing business with North Korea. China is not only the United States' largest trade partner, but also North Korea's. In April, President Donald Trump said on Twitter that, "I explained to the President of China that a trade deal with the U.S. will be far better for them if they solve the North Korean problem."
I explained to the President of China that a trade deal with the U.S. will be far better for them if they solve the North Korean problem!— Donald J. Trump (@realDonaldTrump) April 11, 2017
Daines, like Cui, said conversations between President Trump and Chinese President Xi Jinping, were key to solving the North Korean crisis.
"Just Wednesday afternoon, I received a briefing from Secretary Tillerson; General Mattis, Secretary Mattis now; and General Dunford," Daines said. "One of the points they raised is the important call between President Xi and President Trump that happened that morning. They had an hour-long conversation. I think that just highlights the importance of a strong China-U.S. relationship for trade, as well as assuring the world remains peaceful."