China's Beef Prices Skyrocket to $345 / kg
There has been significant media coverage in China recently pertaining to the increase in beef prices for the 11th consecutive year. Prices have skyrockets 40% and in turn, people are consuming less beef. In China, the average amount of beef consumed per person is 4.1 kg/year. Compared to the western countries whose average beef consumption per person is 50 kg/year, it is obvious that China needs a solution to their beef industry troubles.
Out of all the meat industries in the world, the beef cattle industry is most difficult to develop. The long growth cycle and low breeding efficiency only allows for one calf birth per year, per breeding cow. This type of large scale breeding requires a great deal of financial investment. Unfortunately, due to its lengthy cycle, costly investment, and increased risk for disease, many cattle farmers are turning to pork and poultry production.
In attempts to resolve the beef cattle dilemma in China, many companies and producers have turned to overseas for help. Breeding bases have been set up in ccountries such as Australia, Brazil and New Zealand. These countries possess rich pastures for grazing and ample space and resources for cattle to grow and mature properly.
Early last year, Shanghai P.X. Group Co, a Chinese property developer, won the approval to purchase 16 farms in New Zealand to increase exports to Asia. On a similar note, Australia has been seeking billions of dollars in Chinese investment to develop vast areas of prized farming land in the country’s northern regions in hopes to increase exports and boost food security in China. In more recent news, China sought out an agreement with Santori, the beef cattle division of the large publicly listed Indonesian agri-company Japfa, to build their country’s largest feedlot. While the Santori feedlot will be focused on feeding locally bred Chinese cattle, countries seeking to develop a feeder cattle export trade with the country are jumping on the opportunity.
Based on these investments, it is evident that China is on the lookout for countries that have the necessary resources to produce and export high quality beef. With that being said, this poses great opportunity for Canadian beef producers, who ranked 6th in the world for beef exports. With more than 90,000 beef cattle farms and ranches, Canada’s vast land, bountiful resources, and lower production costs make for the perfect place for China to invest in high quality beef production. Investment from China into Canada’s beef industry will give producers and feedlots the opportunity to expand their businesses, export their products at a great price, and allow them to make valuable connections in China to help further their businesses.