Why is Chinese beef so expensive?

 Why is Chinese beef so expensive?

Consumption upgrading to eat beef, fitness and weight loss to eat beef, improve life to eat beef... But it was only in the supermarket that we found that beef is so expensive now. Many netizens also reflected that the price of beef noodles at home has also risen.

According to the Ministry of Agriculture and Rural National Wholesale Market Price Information System for Agricultural Products monitoring, beef prices continued to rise since last summer. Even after the Spring Festival, beef wholesale prices have risen by 11.58% since the beginning of 2018.

And thats just the wholesale price.

Beef Wholesale Price since 2018 (Data Source: National Wholesale Market Price Information System of Agricultural Products, Ministry of Agriculture and Rural Areas)

Chinas beef consumption ranks second in the world

According to CCTV Financial and Economic Report on March 1, the person in charge of a large supermarket in Chongqing said that beef prices have risen a little fast since last winter. Although there has been a slight correction in the recent week, they are also running at a high level. The beef tenderloin and forelegs are above 50 yuan per kilogram, and the other parts are also more than 30 yuan per kilogram after discount.

Yang Fengchong, a beef dealer in Chongqing, mainly distributes beef to supermarkets, specialty stores and restaurants. He told reporters that since September last year, beef wholesale prices have increased six times, with a cumulative increase of more than 10%.

At 8 p.m. in a food market in Fengtai, Beijing, on the eve of the Spring Festival, the owner of a pork stall was still trying to attract customers, while Zhang Ling, who sells beef and mutton, closed the stall early, CNN reported.* The original price of shoulder meat sold by her family is 57 yuan per kilogram and 33.8 yuan after discount at night.

In January this year, when she went to buy beef in Jianghua, Guizhou province, she found that the price of beef was 42.8 yuan per kilogram, which made her sigh, The price is too expensive.

Why is beef so expensive in China? In the final analysis, it is the role of supply-demand relationship.

According to CCTV financial report, in recent years, Chinas meat consumption structure has changed, beef consumption has increased significantly, the proportion of beef in red meat consumption has increased from about 4% to 11% in 2018.

According to the National Planning for the Development of Beef and Mutton Production (2013-2020):

In 2010, Chinas per capita beef consumption was 4.87 kg, an increase of 12% over 2005 and an average annual growth of 2.3%.

It is estimated that the per capita beef consumption will be 5.49 kg in 2020, 0.3 kg more than in 2015, with an average annual increase of 1.13%.

According to the national population of 1.45 billion in 2020, the total beef consumption demand increased from 7.21 million tons in 2015 to 7.96 million tons.

At present, Chinas beef consumption has ranked second in the world, accounting for 13% of the global total.

Increased supply gap

Although demand is increasing, domestic beef cattle stocks are declining. According to the First Financial Report, the gap between beef supply and consumption in China has been increasing every year since 2013. According to industry statistics, the consumption gap of beef reached 967,000 tons in 2017.

In order to make up for the supply gap, China has been increasing imports in recent years.

According to the data released by the General Administration of Customs in January, China imported 1.039 million tons of beef in the whole year of last year. This is the first time that Chinas imports of beef (excluding miscellaneous cattle) in Zhengguan have exceeded 1 million tons since the explosive growth in 2012. Nearly three of them are from Brazil.

In addition, Australias beef exports to China increased by nearly 50% to 163,000 tons.

Before the outbreak of mad cow disease in the United States in 2003, two-thirds of Chinas imported beef came from the United States. Since then, considering food safety, China has imposed a ban on U.S. beef imports in January 2004. Until 2017, American beef was re-approved for import. However, American beef entering the Chinese market now belongs to high-end varieties, and the price even reaches several hundred yuan per kilogram.

What is the gap between beef cattle farming in China?

Beef prices are rising, and farmers are supposed to be more enthusiastic. But the opposite is true. According to CCTV financial report, He Chuandong, deputy director of animal husbandry and Veterinary Bureau in Fengdu County, Chongqing, said that at present, small and medium-sized farmers make about 3,000 yuan in profit from fattening a cow, while the income of cows, even with government subsidies, can not reach this level. At the same time, self-feeding needs more funds and technology, and now small and medium-sized farmers do not have such conditions, so the reduction of basic cows, resulting in the current beef cattle market supply reduction.

At present, the price of local beef cattle in Fengdu, Chongqing, is about 15 yuan per cattle, which is one to two yuan higher than in 2017. But farmers say that even if the price of beef cattle rises, they have no intention of expanding the hull, mainly because the cost of cattle raising increases rapidly, especially the cost of labor, infrastructure, epidemic prevention and water and electricity. Zhang Zheng, a beef cattle farmer in Fengdu County, Chongqing, said that the cost of feed increased by five or six hundred yuan, and that other costs plus the cost of calves would cost more than one thousand yuan.

Domestic beef supply is tight, mainly due to the small and scattered pattern of beef cattle industry development. A study by Guohai Securities in 2017 pointed out that the mode of free-range feeding led to the domestic beef cattle output far below the international average. In 2014, the average output of beef head in China was only 1398 kg, while the world average was 2096 kg. On the other hand, the complete production cycle of beef cattle in China is usually two to three years. At present, the stock of beef cattle in China is declining year by year, so it is difficult for the stock of beef cattle to grow rapidly.

Previously, Xu Shangzhong, president of the Cattle Branch of China Livestock Association, said in an interview that the reproductive survival rate of cows in our country is relatively low. After investigation, we found that the reproductive survival rate of American cows is 95%, the world average is 90%, and that of Chinese cows is about 70%.

Secondly, the ketone weight of Chinese beef cattle is low (about 147 kg after removing head, tail and viscera), while the world average is 200 kg. The ketone weight of American beef cattle can reach 300 kg. A cow is also bred, and only half of the beef sold is sold.

Thirdly, Chinese beef cattle have a long breeding cycle. American beef cattle can come out at the age of one and a half, while Chinese beef cattle usually take more than two years to reach the weight of beef cattle. In addition, the cost of cultivation is also on the high side. For example, a ton of corn feed costs only about 900 yuan in the United States and more than 1500 yuan in China.

These gaps are due to the fact that retail farming dominates China. In January 2018, the official website of the Chinese Meat Association published an Investigation Report of the American Beef Industry. The report reads as follows:

The team members went to the Herb Abbott Farm, JBS Beef Cattle Slaughtering Plant, Greater Omaha Steak Processing Plant and Chavez Group Customer Service Department.

Herb Abbott farm stocks 20,000 head, the fattening farm uses advanced feeding technology, with the advantage of Nebraskas unique corn feed, the development of large-scale farming, greatly reducing the cost of farming, while vigorously developing circular agriculture, using advanced science and technology to save energy and reduce emissions, the annual output of 44,000 head, but the entire cattle farm staff is only 18 people, its scale efficiency We can see more clearly.

Source: Xiao Qi_N6799, Responsible Editor of Economic Reporting in the 21st Century