SHANGHAI — The United States has become the largest exporter of pet food products to China, according to a trade report shared by US Department of Agriculture (USDA) Foreign Agricultural Service (FAS) on Feb. 10.

This January marks three years since the establishment of a Phase One trade agreement with China, which required China to purchase at least $32 billion in US agricultural products — including pet food and “non-ruminant derived animal feed,” feed additives, dairy and dairy-based products, meat and poultry, rice, and other commodities — by the end of 2021.

As part of the agreement, China agreed to lift its import ban on US pet food products containing ruminant ingredients and begin allowing importation of US pet food products formulated with poultry products.

These trade negotiations have paid off for US pet food exporters in the long run. Pet food exports from the United States to China totaled more than $304 million from January to November 2022, up nearly 200% year-over-year, according to China’s General Administration of Customs (GACC). This amounted to more than 44,000 tonnes of pet food and accounted for nearly 50% of all China’s imports over the 11-month period.

“In February 2022, avian influenza outbreaks in Canada led to China’s ban on the importation of Canadian pet foods containing poultry ingredients,” the USDA FAS stated in the report. “As a result, multiple large international pet food enterprises (e.g., Acana) transferred poultry-related exporting capacity from Canada to facilities based in other countries, including the United States, thereby allowing their companies to maintain business with China.”

Additionally, the number of pet food and pet food ingredient facilities registered by the GACC has steadily increased since the trade agreement. According to the USDA FAS, there are now 88 US facilities registered with the GACC, 25 of which were added or renewed in 2022. This is compared to just 24 US facilities that were registered in 2020. Compared to other trade competitors, the United States has the most GACC-registered pet food facilities by a landslide — Thailand has 33, Germany has 21, Italy has 16, Spain has 13, and Canada, which is the top pet food competitor to the United States, has nine GACC-registered facilities.

China’s Ministry of Agriculture and Rural Affairs (MARA) approved 435 SKUs for imported dog and cat food products in 2022, 132 of which were for US pet food products. This marks the second consecutive year that the United States ranked No. 1 in the percentage of approved pet food SKU imports to China.

While the Phase One agreement has certainly supported a more robust pet food trade relationship between the United States and China, shifting attitudes around pet ownership in China have also bolstered the growth.

According to the USDA FAS, the number of pet-owning households in China was estimated to exceed 100 million in 2022, and increased disposable income among pet-owning households is underpinning sales of premium pet food products. Pet product purchases currently make up 6.7% of total household expenditures in China, with annual consumption per pet up 2,041 yuan ($286 USD). This is significantly higher than average pet spending among US pet-owning households, which is estimated at 1.7% of total household expenditures.

E-commerce is becoming the preferred purchasing method for Chinese pet owners. The USDA FAS shared that 71% of pet owners prefer online shopping, compared to 37% who prefer to shop offline, according to the 2022 China Pet Industry White Paper.

This sentiment is reflected among both Millennial and older generations of Chinese pet owners. The aging Chinese population is increasingly turning to pets to provide companionship, and are even treating pets as members of the family, similarly to Chinese Millennials. According to the report, China’s older generations are finding convenience and speed with e-commerce, creating an attractive opportunity for US pet food producers looking to capitalize on the Chinese market.

The latest e-commerce sales data shows online pet food sales reached $273 million USD, up 38% year-over-year. Online cat treat sales were $51.7 million, up 32.7% year-over-year, and online dog treat sales totaled $17.3 million, up 31.4% year-over-year.

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