January 25, 2013

China faces high beef prices due to short supplies

Given the continual rise of beef prices, China should be announcing measures which also include increased subsidies to improve cattle supply, according to an industry leader.

The average beef price nationwide has been high over the past months compared with last year, with average daily prices in mid-January up 30% over the same period last year, according to recent reports.

"A shortage of beef supply is the main cause of rising beef prices," Gao Guan, deputy secretary-general of the China Meat Association, said.

Gao noted that farmers and cattle farms have become hesitant about raising cattle because the industry is facing increased feeding costs. The costs have gone up due to a variety of factors, which include rising prices of grain and labor as well as a lack of good pastures.

The feeding period for adult cattle lasts three to four years, which Gao said takes much longer than raising poultry or pigs.

A lack of government support is another cause of lower motivation for farmers to raise cattle, which leads to a declining supply of beef, said Gao of the China Meat Association, adding that the association he works for has already submitted suggestions for supporting cattle cultivation to the Ministry of Agriculture.

The government has given stronger support to pig cultivation because pork accounts for a larger percentage of total meat consumption, and rising pork prices would contribute even more to a high rate of inflation, added Gao.