October 24, 2023


China's beef production to reach record levels in 2024, USDA reports



The United States Department of Agriculture (USDA) has released its latest forecast, indicating that China's beef production is set to reach historically high levels in 2024, with a predicted growth rate of 2.7%, resulting in a total of 7.7 million tonnes, the United Kingdom Agriculture and Horticulture Development Board reported.


This surge is attributed to the substantial live cattle inventory, following a phase of domestic beef herd expansion. But the rapid economic growth may be tempered by a slowdown in the economy, leading to a stabilisation in consumer demand for beef.


Throughout the first quarter of 2023, wholesale beef prices in China remained relatively steady, peaking at CNY 78.6 per kg. Subsequently, there was a gradual decline, with prices hitting lows of CNY 70.8 per kg before stabilizing in recent weeks. In the final week of September, the average wholesale beef price in China stood at CNY 72.5 per kg, reflecting a 6% decrease compared to the same period in the previous year. This decrease is likely a response to increased supply and reduced demand.


Anticipated Chinese beef consumption for 2024 remains unchanged at approximately 11 million tonnes. The USDA's projections suggest that domestically produced lower-end beef products are expected to capture a larger market share, primarily at the expense of high-end imported beef, as consumers adjust their preferences amid the economic deceleration.


Out-of-home services, including hotels, restaurants, and institutions, are projected to remain the primary channels for beef consumption in China. Simultaneously, online beef sales are likely to gain popularity due to their convenience. A notable portion of domestically produced beef in China is marketed as fresh, but the USDA anticipates a growing proportion will be sold as chilled, particularly driven by online sales.


Looking at recent data for 2023 (January–August), China has imported a total of 1.8 million tonnes (product weight; PW) of fresh and frozen beef, representing a 6% increase compared to the same period in 2022. The majority of fresh and frozen beef imports originate from Brazil, accounting for approximately 735,000 tonnes (PW) thus far in 2023, followed by key contributors such as Argentina and Uruguay. These countries provide cost-effective grass-fed beef, primarily employed in food processing facilities and lower-end dining establishments.


As consumer demand stabilises, it is expected that demand for beef imports may recede, potentially reducing the import deficit. Nevertheless, there remains a niche market for higher-quality beef, particularly imports from the US, New Zealand, and Australia. These products can maintain their presence in the retail and upscale out-of-home services segments, underscoring their value.


Considering beef offal, imports to China for 2023 (January–August) totalled 23,800 tonnes (PW), reflecting a 22.3% decrease compared to the same period in 2022 but an increase from 2021 figures. The majority of beef offal originates from Uruguay, the US, and New Zealand, with market shares of 37%, 27%, and 20%, respectively, in 2023.


The USDA's predictions suggest that Chinese beef import volumes are poised to reduce by 5% in 2024 compared to 2023, influenced by the plateauing domestic demand and cost-related challenges for importers. However, global demand is anticipated to be sustained, with small increases in markets such as India and Canada, ensuring continued export opportunities for major players like Brazil and Australia. These complex supply and demand dynamics have repercussions for beef availability on the global market, which, in turn, can impact prices in the EU and UK.


As China continues to strengthen its position as the world's third-largest beef producer, consumption growth is expected to level off in light of diminishing economic confidence. China remains a pivotal player in the global beef market, importing substantial volumes from diverse countries to serve various domestic markets.


-      UK Agriculture and Horticulture Development Board

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