the beef cattle and beef industry development in china€¦ · the beef cattle and beef industry...

The beef cattle and beef industry development in China

Dr. Xiangdong Hu

Institute of Agricultural Economics and Development,

Chinese Academy of Agricultural Sciences Hanoi, Vietnam, Aug. 10, 2017

Contents

Ø Introduction of the beef cattle industry

Ø The beef cattle situation based on survey data

Ø The prospect for the beef industry

Contents

Ø Introduction for the overall beef cattle industry



1. Beef production increased from 269,000 tons in 1980 to 7,001,000 tons in 2015. 2. Cattle is changing the role from draft cattle to beef cattle.

269

7.001

- 1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000

1980

1990

1992

1994

1996

1998

1999

2000

2002

2004

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Beef production from 1980-2015 （1000 tons）

Source:Na+onalBureauofSta+s+csofChina

The inventory and slaughter of cattle from 2006 to 2015 (million tons)

0,0

20,0

40,0

60,0

80,0

100,0

120,0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Total cattle Slaughter Dairy cows Beef cattle Source:Na+onalBureauofSta+s+csofChina

The different scale beef cattle farm slaughter percentage, the small scale quit out and large scale increased dramatically.

8,8

11,0

7,3

10,2

3,1 3,8

2,2 3,5

0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0

2009

2011

2013

2015

2010

2012

2014

2009

2011

2013

2015

2010

2012

2014

2009

2011

2013

2015

2010

2012

2014

1-9 heads 10-49 heads 50-99 heads 100-499 heads 500-999 heads 1000 heads +

Percentage (%)

Source:MOA

The resources of dairy herd is a growing source for beef production, providing approx. 6 million slaughter animals in 2016.

2.280

3.563

- 500

1.000 1.500 2.000 2.500 3.000 3.500 4.000

1991

19

92

1993

19

94

1995

19

96

1997

19

98

1999

20

00

2001

20

02

2003

20

04

2005

20

06

2007

20

08

2009

20

10

2011

20

12

2013

20

14

2015

20

16

Finishing dairy cows (1,000 heads) Finishing male dairy calves (1,000 heads) Source:MOAandes+ma+on

Beef market was pretty good. There was few fluctuation, and the beef price kept the increase trend.

0 10 20 30 40 50 60 70 80

1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Pork Chicken Beef Mutton

CNY/kg

After 2011, the beef import turn to the rapid rising channel. Export was main for the Hongkong and Macao.

580.049

-

100.000

200.000

300.000

400.000

500.000

600.000

700.000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Import Export

tons


There are more and more countries to export beef to China.

Before Brazil Uruguay Australia

Year of 2016 Brazil Uruguay Australia New Zealand Namibia Hungary Mongolia America

The port in Henan province accepted the import live cattle from Australia for slaughtering; The new port of Shidao in Shandong province is another one.

US beef imports in China

•  US beef came back China’s market after 20th Jun. 2017; it prohibited to import

since 2003.

•  The first US beef imported from Shanghai, which sold via e-commercial. The

prices of filet steak and rib eye were 33.89USD/300g and 38.35USD/400g, which

were higher than Australian and South American.

•  Until now, it was few US beef coming into China; China has very strict regulation

for the imported beef quality, such as no ractopamine usage.

Beef smuggling still existed, and its players and channels are expanding

•  Quantity: According to estimation, beef smuggling in China accounts for 10% of

domestic beef consumption.

•  Product type: Beef products, live cattle(mainly from South-east countries).

•  Channel: Mainly distributed in some provinces such as Guangdong, Hunan,

Shanghai, Guangxi, Yunnan, etc

Per-capita beef consumption below 1 kg in rural areas and 2.5 kg in urban areas(at home consumption). The average consumption 5-6 kg. 　 Pork (kg per capita) Beef(kg per capita) Mutton(kg per capita) Poultry(kg per capita)

Year Rural Urban Rural Urban Rural Urban Rural Urban 2000 13.3 16.7 0.5 2.0 0.6 1.4 2.8 5.4 2001 13.4 16.0 0.6 1.9 0.6 1.3 2.9 5.3 2002 13.7 20.3 0.5 1.9 0.7 1.1 2.9 9.2 2003 13.8 20.4 0.5 2.0 0.8 1.3 3.2 9.3 2004 13.5 19.2 0.5 2.3 0.8 1.4 3.1 6.4 2005 15.6 20.2 0.6 2.3 0.8 1.4 3.7 9.0 2006 15.5 20.0 0.7 2.4 0.9 1.4 3.5 8.3 2007 13.4 18.2 0.7 2.6 0.8 1.3 3.9 9.7 2008 12.7 19.3 0.6 2.2 0.7 1.2 4.4 8.0 2009 14.0 20.5 0.6 2.4 0.8 1.3 4.3 10.5 2010 14.4 20.7 0.6 2.5 0.8 1.3 4.2 10.2 2011 14.4 20.6 1.0 2.8 0.9 1.7 4.5 10.6 2012 14.4 21.2 1.0 2.5 0.9 1.2 4.5 10.8 2013 19.1 20.4 0.8 2.2 0.7 1.1 6.2 8.1 2014 19.2 20.8 0.8 2.2 0.7 1.2 6.7 9.1 2015 19.5 20.7 0.8 2.4 0.9 1.5 7.1 9.4


Beef consumption is still potential increase following as the income increase and urbanization.

Contents




Samples for the beef cattle farms

•  Three levels for samples:

1.  250 villages monthly data since 2008

2.  750 beef cattle farms monthly data since 2008

3.  1499-1513 beef cattle feedlots (50 heads +) since 2015.

1. Machinery in agriculture sector 2. Farmer leave rural area especially for those poverty and mountainous areas where are main beef cattle cultivation regions.

25,2 23,9 22,3 20,5 19,4 18,8 18,6

0,0

5,0

10,0

15,0

20,0

25,0

30,0

2010 2011 2012 2013 2014 2015 2016

number beef cattle farms/total farms (%)

Source:surveydata

The beef cattle inventory, yearly slaughter and breeding beef cattle fall decline in survey villages. Existing beef cattle farms never expand the scale so many to make up quitting farms.

0

100

200

300

400

500

600

700

800

2010 2011 2012 2013 2014 2015 2016

Monthly inventory (heads) Yearly slaughter (heads) Beef breeding cattle (heads)

Source:surveydata

The scaled beef cattle farms keep relatively stable. (1) Facilities investment (2) feed base

159

67

3 11

0

50

100

150

200

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

2015 2016 2017

Inventory breeding beef cattle New born calves Slaughter Source:surveydata

The average size in scaled farms from 2015 to 2017 (heads)

The cost and revenue in the finishing beef cattle farms

Jun.-17 May- 17 Jun.-16 Live weight (kg) 498.2 507.3 535.6 Price (USD/kg) 3.5 3.9 3.8 Calf weight (kg) 309.0 297.5 318.0 Price (USD/kg) 3.8 4.4 4.4 Revenue of 450Kg beef cattle (USD/head) 1570.7 1756.1 1710.3 Cost of 450Kg beef cattle(USD/head) 1399.8 1532.1 1512.6 Profit for 450 Kg beef cattle(USD/head) 171.0 224.0 197.7 Profit per day (USD/head) 1.02 1.18 0.95 Beef cattle for slaughtering (heads) 1466 510 724 Farms selling the cattle 66 53 54 Total Farms 750 750 750

1059,0 1168,0 1150,9

293,5 310,3 310,2 47,3 53,9 51,5

0,0

500,0

1000,0

1500,0

Jun.-17 May-17 Jun.-17

Calf cost Feed cost Other cost USD/head

Source:surveydata

Jun.-17 May-17 Jun.-17

Calf live weight (kg) 281 275.2 343.8

Price (USD/kg) 4.2 4.0 3.4

Revenue of 300Kg calf (USD/head) 1270.9 1212.2 1025.2

Cost of 300Kg calf (USD/head) 773.0 787.9 751.1

Profit for 300Kg calf (USD/head) 497.9 424.3 274.1

Profit per day (USD/head) 1.4 1.2 0.8

Calf for selling (head) 107 88 317

Farms selling the cattle 27 24 21

Total Farms 750 750 750

The cost and revenue of the cow-calf farms

Source:surveydata

Contents




The overall beef supply-demand

•  The amount of cattle inventory will remain stable with a little decrease. The

amount of breeding cattle inventory will keep stable under the government

support.

•  The cattle slaughter weight will continue to rise.

•  The beef price will stay high level.

•  the imports of beef production will increase, the proportion of the smuggling

market is expected to decrease with cracking down on smuggling.

Some influence factors with high production cost

•  Limited factors for the development beef cattle: Land, capital and environment

protection.

①  Loan guarantees

②  Protection of prime farmland

③  The MOA makes the pollution treatment of livestock and poultry as one of

the key tasks in the 13th five-year plan.

Opportunities for the beef industry

•  In 2017, the pilots’ area for Grain crops to forage grass will be expanded to

670,000 ha; it will promote the development of grass planting and cattle breeding

and the combination of grass planting and cattle breeding.

•  Grass animal husbandry development plan will make a promotion of increasing

efficiency in beef industry.

•  Poverty alleviation plan will encourage some poor areas to grow grass, raise beef

cattle and sheep.

Opportunities for the beef industry

•  The huge quantity of by-product of crops and by-products of agricultural products

processing industry: Pollution or feed resources for cattle?

•  Decision makers enable the beef industry to make a contribution to sustainable

agricultural development.

•  Huge market: Beef demand will keep increase, and there are more and more

people to consume the beef .

Knowledge is our business

Any Questions? Xiangdong Hu

Office Tel.：+86-010-82106717

Mobile：+86-0-13811614436

E-mail: [email protected]

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