June 14, 2022

 

Industry investments - The impetus for expanding China's meat production

 

China's combined output of pork, beef, mutton and poultry in 2021 was 88.87 million tonnes, a 16.3% increase over 2020, according to data from the National Bureau of Statistics.

 

For the ruminant sector, the output of beef was 6.98 million tonnes, a 3.7% increase. Milk output expanded 7.1% on year to 36.83 million tonnes.

 

However, the ruminant sector's steady growth was insufficient to satisfy rising consumption, explaining China's dependence on imports. Hence, its beef imports reached 2.33 million tonnes in 2021, a year-on-year increase of 10%. Studies show that China's import dependence on beef is about 30%, while that of dairy products is higher at 50%. The shortage of beef and milk, together with the low reproductive rate of ruminants, means that investments in the ruminant sector represent good development opportunities in the next decade.

 

The need for investments also applies to the ruminant feed market. In fact, several big players have invested in both feed projects and ruminant farming last year, including Haid Group (cattle and sheep feed), as well as Pengxin Group, Wen's Group and Shennong Group (beef cattle farming).

 

  Ningxia Dabeinong Science and Technology Park

 

 

Just last December, Ningxia Dabeinong completed a project to upgrade its capacity to annually produce 680,000 tonnes of high-end ruminant feed, 190,000 tonnes of pig feed and 190,000 tonnes of aquatic feed.

 

In that same month, Haid Group set up its Ruminant Feed Business Division to head its development in ruminant feed. Additionally, Hefeng Group, a seasoned player in the ruminant feed market, positions ruminant feed as its strategic business and was later permitted to issue up to ¥1.5 billion in convertible bonds, which will be invested in projects with a combined annual output of 300,000 tonnes of pig feed and 150,000 tonnes of ruminant feed.

 

If all go according to plan, these investments could stir the exponential expansion of feed production that grows in tandem with rising meat production in China. 

 

Meanwhile, according to data from the 2021 National Feed Industry Development Overview jointly released by China's Ministry of Agriculture and Rural Affairs and the China Feed Industry Association, the total national industrial feed output last year was 293.443 million tonnes, a 16.1% increase over the previous year.

 

The output of ruminant feed, specifically, was 14.803 million tonnes, a 12.2% increase.

 

- David Lin, eFeedLink