China: beef prices collapse to a five-year low

The Chinese beef market has seen an interesting dynamic recently, with prices falling to a five-year low. The country’s authorities have been encouraging farmers to increase production domestically, while also supporting imports. However, the cooling economy has led to an oversupply of meat, which has reduced local beef prices to levels not seen in five years.

Wholesale beef prices have fallen 18% from last year’s peak to around 62 yuan ($8.53) per kilogram. That has made much of the cattle industry unprofitable, which could create problems for the state budget. The Ministry of Agriculture has called on local authorities to support farmers with subsidies and feed to avoid a crisis.

The beef situation has also become an issue for the country’s food security. The Chinese government is striving for self-sufficiency in key markets, including the beef market. With deflationary pressures gripping the economy, Beijing has been forced to intervene and support various sectors ranging from livestock to crops.

One of the challenges has been the increase in beef imports into the country. In the first five months of this year, China’s beef imports increased by 23%. Beijing is actively opening up access to its market to other countries such as Brazil, Spain and recently added to the list – Australia. This can be termed as food diplomacy, which is improving relations between the countries.

Beef is a relatively expensive meat in China, costing almost three times more than pork. Demand for beef has grown along with the country’s growing prosperity. However, currently, with the worsening economic situation, demand for beef is declining, creating additional challenges for producers and the Chinese government.

Tags: Beef cattle, China, prices