While beef production and consumption in China is much smaller than in the US, Chinese beef production is expected to grow at a compound annual growth rate of 1.4 percent, reaching 700 million tons in 2015, according to a report from Frost & Sullivan (China). Traditionally, Chinese people eat pork and chicken, primarily because of the high cost of beef. As standards of living continue to increase in China, more of the population is expected to consume beef.

In 2010, China was the third-largest beef consumer and producer in the world. When tallied, the 2011 figures are expected to show beef production slightly lower than in 2010. In 2010, China became a net importer of beef for the first time, with 23,700 tons of beef imported and 22,100 tons exported. It is expected that total 2011 figures will show China imported 33,900 tons in 2011 while exporting 17,700 tons.

Consumption outside the home is the largest market. In 2010, restaurant sales accounted for 60 percent of consumption, while household consumption was 32 percent, and industrial consumption was 8 percent. The cost of beef has been increasing in China since 2006. As of December 2011, the national average beef price was 39.78 RMB per kg, which is double the price in 2006.

Compared with developed countries, China’s beef industry is lagging behind in varieties of cattle, production performance and feeding. There are few species of cattle especially well suited for food production, and producers breeding cattle lack good management practices. These factors lead to a long time to market and a low efficiency in beef maturation. In addition, there are the problems of disease and residual hormones in beef, which limit the export of beef to many developed countries.

For more information on the report, Status Quo and Future Projection of China’s Beef Market, contact Zhenhua Chen, Frost & Sullivan (China), +86 21 5407 5780, zhenhua.chen@frost.com