BEIJING, CHINA – China, with beef production of more than 7 million tons annually, is the third-largest beef producer in the world; but backyard farms and manual slaughter units are the main players in this industry, according to a new study titled "Investment Report on China Beef Industry" by Research and Markets.
Large cattle farms with an annual cattle crop higher than 100 head have gained a market share of only 11% while modern slaughterhouses’ market share is only 13%. Room Temperature Beef accounts for more than 80% of total beef production.
China breeder-cow inventory kept declining in recent years due to poor earnings from the breeder cow business, which will result in a decline in China’s cattle inventory and beef production from 2008. It is predicted China’s beef production will recover in 2012.
In 2007, there were about 1,000 cattle slaughterhouses in China with total capacity of 12 million head per year and total beef production of less than 1 million tons, which accounts for 20% of national beef cattle crop and 13% of national beef production, respectively. In 2007, China’s largest beef company slaughtered only 150,000 head.
Declining cattle inventory made public company Fucheng (Hebei)’s beef production fall by 18% in 2007. Other large beef companies will also suffer with a capacity utilization rate only 20%. Small companies will soon suspend production or exit the industry altogether, which will allow integration opportunities for large companies. The largest beef company in China, Jilin Haoyue group, planned to double its capacity to 1 million head before 2010, according to the study.
Due to serious meat-quality problems caused by illegal cattle slaughter units, the study’s publisher predicts China’s government will restrict small slaughterhouses and punish illegal slaughtering.
"There is excellent potential for U.S. beef exports to China – but over the long run," Thad Lively, U.S. Meat Export Federation senior vice president for policy, planning and research, told MEAT&POULTRY.com. "Chinese per capita beef consumption is relatively high for a developing country, and as personal income grows we expect Chinese consumption to increase and the composition of the cuts and product they consume to change and expand."
China currently has a high level of self-sufficiency in beef production, but their production methods are very inefficient and highly dependent on scarce resources, such as grazing land and water. So, if China is going to maintain its current levels of per capita beef consumption, it will have to turn to imports, he added.
"Currently, this market is closed because the U.S. and China have been unable to reach an agreement on an import protocol," Mr. Lively said. "U.S.M.E.F. is hopeful that the new administration will make negotiating a beef protocol with China one of its objectives as it pursues its global trade agenda."
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