October 2, 2012

China's beef production is expected to rise less than 1% to 5.58 million tonnes in 2013 due to a mild increase of calf production and slaughter.

The government's subsidy to support beef cow production will no doubt help beef cow stocks and calf crop production in coming years.

Total beef consumption is expected to shift upwards in response to steady imports and slightly higher domestic beef production. Beef imports are expected to increase 12% from the revised 2012 estimate to 34,000 tonnes (MT), carcass weight equivalence (CWE), driven by robust demand from the rising middle class.

However, decreased consumption of lower-income consumers is offset by increased middle-class consumption. As a result, per capita consumption remains only about four kilogrammes. Live cattle imports are forecast at 115,000 and 120,000 heads in 2012 and 2013, up 21% and 4%, respectively, with breeding cows accounting for 90%, driven by strong demand for dairy genetic improvement.

Beef exports will likely decline 7% from the revised 2012 estimate to 43,000 million tonnes given slow economic growth in export markets and high Chinese export unit price.

Beef exports to Hong Kong, China's largest export market, are strongly challenged by Brazilian exports to Hong Kong because of competitive export prices, while exports to Japan will likely be dampened by Japan's relevant level consumption, higher stocks, and greater volume of imports of US beef cuts.

Cattle exports are expected to remain the same due to stagnant demand in Hong Kong and Macau, the only exports markets.