By MITCH LIES

Capital Press

BEIJING -- A growing livestock industry, increasing consumption of beef and limited feed supplies have China looking to the U.S. for feed.

China imported $10 billion worth of soybeans last year for feed and $750 million worth of other feed and fodder, according to the U.S. Embassy here. China also imported $2 billion of U.S. forestry and fishery products last year as part of $19.8 billion in total U.S. agricultural exports, according to the embassy.

This year is starting even stronger. U.S. agricultural exports to China have increased 40 percent, up between $5 billion and $6 billion, over the first six months of this year, according to the embassy.

U.S. exports of processed fruits and tree nuts to China are rising annually. Household incomes continue to rise here, providing other high-end agricultural products good market opportunities.

U.S. Embassy shared this information in a briefing Sept. 19 to an Oregon business delegation that is on a 13-day, three-country Asia trade mission.

China's domestic food production is hampered by an arable land-base of only 12 percent of the country and a land-base that is shrinking nearly 1 percent per year, according to the embassy. China's water table also is dropping as domestic food producers rely on groundwater to irrigate crops.

Meanwhile, food consumption is increasing. Chanda Beckman, agricultural counsel for the U.S. Consulate General in Chengdu, China, said the consulate expects a four-fold increase in food consumption between 2004 and 2025.

Diets are more protein rich, too, Beckman said, which is driving China to increase its livestock herds.

"China's feed needs are going to continue to expand," Beckman said.

Beckman, in a briefing with an Oregon agricultural delegation, also on Sept. 19, said outside of feed, she sees good opportunities for organic sales in China and dairy exports, particularly powdered milk.

"U.S. products have a good reputation," Beckman said.

When it comes to genetically modified crops, China restricts imports of GMO food crops, but accepts corn and soybeans for feed. The government has approved domestic production of some GMO rice and corn.

The embassy said China is interested in drought-tolerant traits in GMO crops.

As in Korea, U.S. producers are shut off from several Chinese markets because of high tariffs. The tariff on U.S. wine, for example, is 47 percent, Beckman said.

"That turns a $5 bottle of wine to a $55 bottle," she said.

Chile and Australia have free trade agreements with China and control much of China's foreign wine market.

U.S. beef exports to China are occurring despite the fact China essentially bans the trade, Beckman said.

U.S. and Chinese officials have been negotiating a settlement that would allow some above-board U.S. beef exports, but Beckman doesn't expect movement in the negotiations until after the U.S. and Korea ratify a free trade agreement.

One of China's big concerns is they can't trace U.S. meat back to the farm where it was produced, Beckman said.

China also restricts U.S. market access in apples and potatoes.