Rising cattle prices underline quality stock shortage in China

Some of the prices for plain Simmental cattle at the Tongliao Cheng Feng Livestock Trading Centre are very high by European standards, with 500kg Simmental bullocks making the equivalent of EUR2,000, a significant premium on Irish and UK prices.

Tongliao Cheng Feng Livestock Trading Co is based in China’s traditional grasslands grazing base in Inner Mongolia –also home to key beef player Inner Mongolia Kerchin Cattle Industry Co Ltd which now processes Australian carcasses as well as local cattle - and features 140 square kilometres of outdoor pens with sales conducted on site between buyers and sellers.

At a recent sale seven-month old European-breed cattle were sold for up to RMB8,000 (approximately EUR1,000) and three-month old Simmental calves made RMB3,500 with Charolais breed calves going for RMB3,200. Their Luxi and Yellow (both local breeds) counterparts made between RMB2,000 and RMB2,800.

Carcass conformation didn’t seem to be a worry for the traders at the Tongliao market who didn’t appear to be familiar with the EUROP grading system used in European beef processing sector. Cattle and sheep are hauled into the Tongliao market on regular coal and pick-up trucks, adapted with railings on the side. Among the attendance at the market, a buyer for the Pingyao Beef Group which needs a monthly supply of 5,000 cattle to supply beef noodle fast food chain, ‘Guang Yun Niu Rou Mian,’ which has been expanding rapidly.

Many of the cattle at Tongliao appear to come from breeding cooperatives in Shandong province on the east coast, traditionally a locale of backyard beef breeders. The Chang Fa Breeding Cooperative in the Jia Xiang county area of Shandong was recently in Tongliao selling three month old Simmentals at RMB2,900 while the Peng Yao Breeding Cooperative got an average RMB3,500 for three month old Charolais calves.

Rising demand for beef in China has been identified by senior Chinese policymakers –few of whom come from agricultural backgrounds – as an opportunity to raise rural incomes through beef farming but this idea of making a virtue out of a necessity has been hampered by low levels of beef skills in rural areas, resulting in poor performances by stock. Government has significantly subsidised the import of semen as well as Charolais, Limousin and Simmental breeding stock. 

There are worrying shortfalls in feed efficiency: it takes 7kg on average to add 1kg to Chinese beef cattle compared to an average of 5kg in north American beef farms according to Wang Zhi Cai, head of the China Canada Beef Cooperation Alliance, a body set up to transfer skills to Chinese beef farmers.

The problems however run deeper. China lacks a scientific production and breeding programmes according to Shi Wen Li, chairman of Shanxi Qin Bao Livestock Development Co. His firm hired in Australian consultants to improve its feeding and breeding programmes.

Poverty alleviation appears more the priority rather than breeding or quality in two key government plans to build the sector: ‘National Beef & Lamb Meat Production Development Plan 2013-2020’ published in 2013 and the ‘National Grass Production Animal Husbandry Development Plan published in 2016 both emphasise building the sector as a means of curbing rural poverty and lists regions in northern and southwestern China where beef and lamb production is to rise.

China in 2017 was the world’s second largest producer of beef in carcass weight: 7.8 million tons compared to Australia’s 2.12 million tons. China however was the world’s top importer of beef last year at 925,000 tons ahead of second placed Japan on 780,000 tons.