STILLWATER, OKLA. — China’s beef sector is attracting the interest of investors and world beef exporters. After decades of low prices, Chinese live cattle prices of roughly $1 per lb. are higher than those of even the U.S., according to the Oklahoma State University (O.S.U.).
O.S.U’.s Dr. Brad Morgan, department of animal science meat scientist, recently traveled throughout China and talked to several purchasing groups regarding the usefulness, high quality and safety associated with current U.S. beef offerings. One reason for his trip is China’s increasing appetite for U.S. beef.
"China’s foodservice and restaurant sectors have expanded at a rate double than that of its already torrid G.D.P. growth," Mr. Morgan said. "One can find a plethora of new beef-focused restaurants, ranging from hot pot and Korean barbecue restaurants to the Golden Arches of McDonald’s in primary cities like Beijing and Shanghai, which have 18 million people each, as well as smaller secondary cities, as well."
China’s beef industry, however, faces structural problems meeting the new demand, Mr. Morgan said. Household cow-calf operations and the small but growing feedlot industry remains in the hands of small households, whom in recent years have chosen to raise hogs and poultry rather than beef cattle. Cattle’s long production cycle and lean profits make investment unattractive.
China’s "modern" beef slaughter and processing industry, the majority of whose infrastructure is less than 10 years old, is squeezed between high cattle prices and demand constraints for most beef products, Mr. Morgan said.
Mr. Morgan, with the cooperation of the U.S. Meat Export Federation, conducted a series of one-day workshops while in China with several of the largest Chinese food-importing and processing businesses that are beginning to use U.S. beef items in their operations. One organization was the COFCO Corporation, China’s largest diversified products and services supplier in agribusiness and food industry.
During the seminars, Mr. Morgan gave an overview of the U.S. beef industry, the process associated with beef carcass grading and the ongoing and future aspects associated with beef safety programs. "I was amazed by their level of questions and their thirst for knowledge regarding the various aspects associated with the U.S. beef industry," Mr. Morgan said.
Mr. Morgan was also one of two U.S. scientists asked to speak to 800 attendees from 18 countries during the inaugural Pacific Rim Conference, organized by the American Society of Animal Science and the Chinese Association of Animal Science and Veterinary Medicine. The conference's organizers hoped to bridge gaps and facilitate communication and information-sharing between these existing memberships and the growing community of animal and meat scientists in China.
"Currently, the 1.3 billion Chinese are consuming 6 million tons of beef annually, of which they are only raising approximately 25% of their demand," Mr. Morgan said. "We need them to understand U.S. beef and everything that it literally brings to their tables."