The U.S. and China signed the Phase One trade deal on January 15, and the full text of the deal was released. In the agreement, there is a section on animal feed that aims to streamline the import approval process of U.S. feed products by Chinese authorities. Some of the U.S. feed products specifically mentioned in the deal are alfalfa hay pellets and cubes, almond meal pellets and cubes, and timothy hay.
The USDA and Chinese customs officials are required to conduct an on-site visit of U.S. production of these products within one month of the agreement and have import/export protocols in place within three months. Export contacts I spoke with were cautiously optimistic on these developments, welcoming the efforts to improve the sometimes difficult Chinese approval process for U.S. animal feed products.
There could be some opportunity for alfalfa hay pellets in the Chinese swine industry, but it could take some time to develop the market. Allowing U.S. timothy hay is a good development, but it will have to compete with Canadian timothy hay, which is already allowed in China. Lower quality timothy hay could also compete with Australian oaten hay in the Chinese market. With export timothy hay prices down from two years ago, the Chinese could see it as an economical substitute.
Author of The Hoyt Report, providing hay market analysis and insight.
