Soft lounge music pipes through the speakers as elegantly dressed shoppers peruse organic produce and meats at City'super, one of Shanghai's most upscale markets, a cross between Whole Foods and Louis Vuitton. But one look at the price of an American steak is enough to conjure a mental scratch of a needle across this soothing soundtrack: Nearly $60 for a pound of USDA Prime ribeye.
"That's around 30 percent more expensive than the best steak from Australia," says Wang Yansong, manager of the meat purchasing department of City'super. "We hope the price will come down so that we can sell more of it. We now sell a ton of it each month."
That may seem like a lot, but Wang sells nine tons of Australian steak per month. So why is U.S. beef so expensive in China?
"There is still limited supply," says Jason Hafemeister, trade counsel to the U.S. agriculture secretary. "It's trickling into China as we're ramping up, so supply and demand, valued product, people are able to charge more and find customers who will pay for it."
Hafemeister says U.S. beef is a hot commodity in China. But there are other reasons for its stratospheric price — reasons that get at the heart of the shaky trade relationship between the U.S. and China.