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Outlook for Beef Supply and Demand in China

15 November 2014


Beef is not a traditional meat item in China and the market remains in its infancy.

China’s consumption of beef has been historically low at three per cent of overall meat consumption, predominantly consumed by the country’s Muslim population.

The beef sector has, therefore, not been a strategic focus for government in the context of domestic food security, according to Alan O’Brien from the Shanghai Office of Bord Bia, the Irish Food Board.

Domestic beef production in China is predominately “backyard” and slow to modernise, with small herd sizes of just one to nine cows, which is an issue for local manufacturers.

With income growth and the proliferation of western food service chains , such as McDonalds and Burger King, beef has grown in popularity with consumption rising from 0.32kg per capita in the 1980s to 5kg in 2009 and forecast to reach 6kg by 2025.

This figure remains well below average western per capita consumption levels of around 20kg but is significant when China’s population--estimated to reach 1.39bn by 2030--is considered.

Chinese Government Policy Regarding Beef Imports

At farm level, while domestic production systems in China remain largely backyard, production managed to keep pace with demand up to 2008.

However, with surging growth in consumer demand, the sector is now becoming more reliant on imports.

Last year saw a 380 per cent import volume growth to 279,000 tonnes.

Growth in the China’s beef import market relies heavily on the strategy taken by the Chinese government, which must “weigh up” the economic viability of developing the domestic beef sector against a backdrop of rising imported feed costs.

Mr O’Brien said that it is more likely that the government will continue to focus its investment efforts on China’s domestic pork and dairy sector and relax beef import policies in areas of quotas and tariffs.

Last month, China’s cabinet, the State Council, made the announcement that China will increase imports of beef, as well as lamb, but details have yet to be announced on the size of the quota increase and the use of tariff reductions.

It is estimated that beef imports, both “official” and unofficial combined, could reach 1.7 million by 2018, representing a year-on-year increase of approximately 15-20 per cent.

Currently, China’s beef import market is dominated by Australia (51 per cent), Uruguay (25 per cent), New Zealand (17 per cent) and Canada (nine per cent).

November 2014

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