Published:      August 2008

Pages :           128

Price (USD):   5800 / corporate user PDF licence

  86 - 10 - 6440 2118   boabc@boabc.com

Research Background

With beef production above 7 million tons, China is the 3rd largest beef producer in the world; but backyard farms and manual slaughter units are main players of the industry. Large cattle farms with annual cattle crop higher than 100 heads only gain a market share of 11%, modern slaughterhouses’ market share is only 13%. For beef products, Room Temperature Beef account for more than 80% of total beef production. In recent years, China breeder cow inventory kept declining due to poor earnings from breeder cow business, which will make China cattle inventory and beef production keep declining from 2008. China beef production will only recover in 2012.

In 2007, there were about 1000 cattle slaughterhouses in China with total capacity of 12 million heads per year and total beef production less than 1 million tons, which accounts for 20% of national beef cattle crop and 13% of national beef production respectively. The largest company only slaughtered 150 thousand heads in 2007.

Declining cattle inventory make public company -- Fucheng (Hebei)’s beef production fall by 18% in 2007, and other large beef companies also suffers with capacity utilization rate only 20%. Small companies will soon suspend production or exit the industry, which make integration opportunities for large companies. The largest beef company in China ? Jilin Haoyue group planned to double its capacity to 1 million heads before 2010.

Because of serious meat quality problems of illegal cattle slaughter units, we predict China government will restrict small slaughterhouses and punish illegal slaughtering; in 2007 <Interim Measures of Appointed Slaughter for Cattle, Sheep & Goat and Poultry> was issued by Hebei Provincial government and came into force from April 1st of the same year. In this Measure, qualification and quantity of cattle slaughterhouses in Hebei were confined. This was the first province-level regulation requiring cattle Appointed Slaughter; these measures all benefit large companies. By lobbying of large companies, some areas like Heilongjiang province began to give subsidy for breeder cow farmers. Although low subsidy make the support policy is not so effective, it’s still a good start toward more subsidies and we predit more areas will follow. These support policies will help recover breeder cow inventory.

In this report, BOABC comprehensively analyzes China beef consumption & Supply from 2000 to 2017. By combining value chain of beef industry and comparison with beef industry of US and Brazil, especially Brazil JBS group which became global largest beef processing company through frequent multinational acquisition, investment opportunities and investment value in China beef industry are concluded.

Table of contents:

1 Policy Environment and Outlook of China Beef Industry 1

1.1 Grain Production Policy 1

1.2 Environmental Protection Policy on Animal Farming 2

1.3 Quality Control over Cattle Farming and Beef Cirlulation 2

1.4 Livestock Industry Development Pilicy 3

1.5 Government Support Policy for Cattle Farming 3

1.6 Feed Industry Development Policy 4

1.7 Beef Cattle Slaughter Policy 5

1.8 Beef Trade Policy 5

1.9 Evaluation of China Beef Industry 6

2 China Beef Industry Profile 7

2.1 Current Profile 7

2.2 Beef Cattle Breeds 7

2.3 Beef Cattle Inventory 8

2.4 Beef Consumption 9

2.5 Beef Products 10

2.6 Cattle Slaughterhouses 11

2.7 Beef Trade                 11

3 China Beef Consumption 13

3.1 Structure & Trends of Meat Consumption 13

3.2 Structure & Trends of Beef Consumption 14

3.3 Prospects of Household Beef Consumption 16

3.3.1 Structure & Trends of Household Food Consumption 16

3.3.2 Influences of Income Increase 18

3.3.3 Influences of Population Growth 19

3.3.4 Influences of Urbanization 20

3.3.5 Prospects of Household Beef Consumption 21

3.4 Prospects of Outdoor Beef Consumption 22

3.4.1 Influences of Income Increase 22

3.4.2 Influences of Population Growth 24

3.4.3 Influences of Urbanization 24

3.4.4 Prospects of Outdoor Beef Consumption 25

3.5 Prospects of Beef Processing Industry 25

3.5.1 Share of Processed Beef in Processed Meat Products 25

3.5.2 Main Products and Output 27

3.5.3 Processing Capacity 27

3.5.4 Prospects of Beef Processing Industry 28

3.6 Consumption of Top-grade Beef & Beef Products 30

3.6.1 Consumption of Top-grade Beef 30

3.6.2 Consumption of Top-grade Beef Products 30

3.6.3 Import of Top-grade Beef 31

3.7 Prospects of Beef Export 33

3.7.1 Main Players of Global Beef Trade 33

3.7.2 Destinations of China Beef Export 35

3.7.3 Main Competitors and Market Size of China Beef Export 35

3.7.4 Impacts of Cost for China Beef Export 37

3.7.5 Impacts of Trade Policy for China Beef Export 37

3.7.6 Prospects of China Beef Export 37

3.8 Impacts of Substitues and Prices 38

3.9 Impacts of Cattle Diseases and Other Uncertainties 39

3.10 Prospects of Beef Consumption 41

4 China Beef Supply         42

4.1 Cattle Inventory & Crop 42

4.1.1 Breeder Cows Inventory 42

4.1.2 Inventory & Crop Volume 43

4.1.3 Inventory & Crop Structure 45

4.1.4 Beef Cattle Crop by Farm Size 47

4.2 Beef Supply by Farming & Grazing Areas 48

4.2.1 Farming Areas 48

4.2.2 Grazing Areas 50

4.2.3 Supply Prospects of Farming & Grazing Areas 50

4.3 Beef Supply by Beef Belts 51

4.3.1 Northeast China 51

4.3.2 Central China 52

4.3.3 Northwest China 53

4.3.4 Southern China 54

4.3.5 Supply Prospects of All Beef Zones 54

4.4 Beef Production 55

4.4.1 Total Production and Species 55

4.4.2 Production of Fresh, Chilled and Frozen Beef 57

4.4.3 Production of Low-end, Middle-end and High-end Beef 58

4.5 Impacts of Feedstuff Supply 59

4.6 Impacts of Beef Trade 60

4.7 Prospects of Beef Supply 60

5 China Beef Demand & Supply Balance 61

5.1 Beef Price 61

5.2 Possibility of Large-amount-Beef-Import 62

5.3 Beef Export 62

5.4 Potencial & Real Beef Consumption 63

5.4.1 Household Consumption 63

5.4.2 Outdoor Consumption 64

5.4.3 Beef Processing         65

5.5 Demand & Supply Balance 66

6 Value Chain of China Beef Cattle Industry 67

6.1 Cost & Profit         67

6.1.1 Cattle Feed Production 68

6.1.2 Breeder Cow Rearing 69

6.1.3 Beef Cattle Rearing 70

6.1.3.1 Different Regions 71

6.1.3.2 Dofferent-Sized Farms 71

6.1.4 Slaughtering         72

6.1.4.1 Mannual & Illegal Slaughter Units 72

6.1.4.2 Modern Slaughterhouses 72

6.1.5 Beef Processing         73

6.2 Value Chain Structure 74

6.2.1 Production Value         72

6.2.2 Production Profit         73

6.3 Proifit Allocation and Reasonability 75

6.4 Impacts of Reasonability of Profit Allocation 75

7 Global Beef Cattle Rearing & Production Cost 76

7.1 China and It’s Share 76

7.2 Cattle Cost & Beef Price in Uinted States 77

7.2.1 Per Capita Meat Consumption Structure 77

7.2.2 Beef Cattle Farm Size         78

7.2.3 Beef Cattle Production Cost 78

7.2.4 Fresh Beef Wholesale Price 79

7.3 Cattle Cost & Beef Price in Brazil 79

7.3.1 Per Capita Meat Consumption Structure 79

7.3.2 Beef Cattle Farm Size         79

7.3.3 Beef Cattle Production Cost 80

7.3.4 Fresh Beef Wholesale Price 80

7.4 Cattle Cost & Beef Price in Australia 81

7.4.1 Per Capita Meat Consumption Structure 81

7.4.2 Beef Cattle Farm Size         81

7.4.3 Beef Cattle Production Cost 82

7.4.4 Fresh Beef Wholesale Price 83

7.5 Cattle Cost & Beef Price in Canada 83

7.5.1 Per Capita Meat Consumption Structure 83

7.5.2 Beef Cattle Farm Size         84

7.5.3 Beef Cattle Production Cost 84

7.5.4 Fresh Beef Wholesale Price 85

7.6 China’s Relative Cost & Price 85

8 China Beef Cattle Slaughter & Processing Industry 86

8.1 Industry Profile                86

8.1.1 Size         86

8.1.2 Profitablity 86

8.1.3 Enterprise 88

8.1.4 Capacity & Layout 88

8.1.5 Technology & Products 89

8.1.6 Marketing                 89

8.2 Large Companies         89

8.2.1 Live Cattle Procurement 89

8.2.2 Product Fabrication 90

8.2.3 Marketing                 91

8.2.4 Competition         92

8.3 Fucheng                 94

8.3.1 Live Cattle Procurement 94

8.3.2 Product Fabrication 95

8.3.3 Marketing                 96

8.3.4 Finance Indice         97

8.4 Beef Industry Evaluation 97

8.4.1 Driving Forces         97

8.4.2 Risks         98

8.5 Industry Prospects 99

9 Investments Analysis on China Cattle Slaughter & Processing Industry 100

9.1 Possibility of Building Large Beef Groups 100

9.2 Investment Opportunities 103

9.3 Investment Value 106

9.3 Investment Strategies 110

10 Beef Industry in United States 110

10.1 Industry Profile 110

10.2 Tyson Foods 111

10.2.1 Live Cattle Procurement 111

10.2.2 Beef Products 112

10.2.3 Sales Revenue 113

10.2.4 Sales Profit 114

10.2.5 Brand Strategy 115

10.3 Smithfileld Foods 116

10.3.1 Live Cattle Procurement 116

10.3.2 Beef Products 117

10.3.3 Sales Revenue 118

10.3.4 Sales Profit 119

10.3.5 Brand Strategy 120

11 Beef Industry in Brazil 122

11.1 Industry Profile 122

11.2 Grupo JBS-Friboi 123

11.2.1 Acquisition History 123

11.2.2 Live Cattle Procurement 125

11.2.3 Beef Products 125

11.2.4 Sales Revenue 126

11.2.5 Sales Profit 127

11.2.6 Brand Strategy 128

Figures

Figure 1, China Cattle Inventory, 1998-2008 8

Figure 2, China Cattle Inventory Structure 9

Figure 3, China Beef Cattle Inventory Structure by Age & Gender 9

Figure 4, China Beef Consumption Structure, 2007 10

Figure 5, China Beef Product Structure, 2007 11

Figure 6, China Imported Beef Structure by Product, 2007 12

Figure 7, China Exported Beef Structure by Product, 2007 12

Figure 9, China Processed Beef Production, 2000-2008 15

Figure 10, China Household, Outdoor and Indutrial Beef Consumption, 2000-2008 15

Figure 11, China Beef Consumption in Urban & Rural Areas, 2000-2008 16

Figure 12, China Household Foods Consumption, 1990-2008 16

Figure 13, China Household Foods Consumption Index, 1990-2008 17

Figure 14, China Household Feeds Consumption Structure, 2007 17

Figure 15, China Indices of Household Real Income, Beef Consumption and Beef Expenditure, 2000-2008 (index of 2000 be 100%) 18

Figure 16, China Household Beef Consumption Index of Urban Residents with Defferent Incomes, 2000-2006 (index of 2000 be 100%) 19

Figure 17, China Indice of Population and Household Beef Consumption, 2008 (index of 2000 be 100%) 20

Figure 18, Impacts of Urbanization on Household Beef Consumption in China, 2000-2008 21

Figure 19, Structure of Household Beef Consumption in China in 2013 and 2017 22

Figure 20, Per Capita Real Income and Outdoor Dinning Expenditure in China, 2000-2008 23

Figure 21, Indice of Population and Outdoor Beef Consumption of China, 2000-2008 (index of 2000 be 100%) 24

Figure 22, Growth Structure of China Outdoor Beef Consumption in 2013 and 2017 25

Figure 23, Production of High & Low tempreture Beef Products, Other Processed Beef Products and Total Processed Beef Volume, 2000-2008 26

Figure 24, Net Beef Used by Processed Beef Products of China, 2000-2008 27

Figure 25, Production of High & Low tempreture Beef Products and Other Processed Beef Products, 2000-2008 28

Figure 26, Growth Structure of Total Processed Beef Products of China in 2013 and 2017 28

Figure 27, Per Capita Outdoor Dinning Expenditure in China, 2000-2008 29

Figure 28, Indice of Real Income and Outdoor Beef Expenditure of China Residents, 2000-2008 (index of 2000 be 100%) 29

Figure 29, Impacts of Urbanization on Outdoor Beef Consumption in China, 2000-2008 30

Figure 30, Consumption of Fresh Beef, Chilled Beef and Low Tempreture Processed Beef Products, 2000-2008 31

Figure 31, Product Structure of China Imported Beef in 2007 32

Figure 32, Source Structure of China Imported Fresh & Chilled Beef in 2007 32

Figure 33, Source Structure of China Imported Frozen Beef in 2007 33

Figure 34, China Beef Imports, 2000-2008 33

Figure 35, Main Players of Global Beef Exports in 2007 34

Figure 36, Main Players of Global Beef Imports in 2007 34

Figure 37, Destination Structure of China Exported Fresh & Chilled Beef in 2007 35

Figure 38, Destination Structure of China Exported Frozen Beef in 2007 36

Figure 39, Destination Structure of China Exported Live Cattle in 2007 36

Figure 40, Retail Prices of Fresh Beef & Chicken Meat in China, 1997-2008 38

Figure 41, Per Capita Household Beef & Chicken Consumption of China, 2000-2008 39

Figure 42, Share of Beef Consumption Growth by Household, Outdoor and Industrial Beef Consumption, of China in 2013 and 2017 40

Table 1, China Beef Supply & Demand Balance Sheet, 2000-2017 41

Figure 43, Breeder Cow Inventory of China, 2000-2008 42

Figure 44, Yellow Cattle, Milk Cow and Buffalo Inventory of China, 2000-2008 43

Figure 45, Yellow Cattle & Buffalo Crop and Milk Cow & Breeder Cow Displacement of China, 2000-2008 44

Figure 46, Low-end, Middle-end and High-end Cattle Crops of China, 2000-2008 45

Figure 47, Structure of China Cattle Inventory by Yellow Cattle, Milk Cow and BUffalo in 2007 46

Figure 48, Structure of China Cattle Crop by Yellow Cattle, Milk Cow and Buffalo in 2007 46

Figure 49, Structure of China Low-end Beef Cattle Crop in 2007 47

Figure 50, China Cattle Crop by Farm Size, 2000-2008 47

Figure 51, China Cattle Crop Index by Farm Size, 2000-2008 (index of 2000 be 100%) 48

Figure 52, Cattle Crop in Farming Areas of China, 2000-2008 49

Figure 53, Cattle Cattle Crop by Provinces in Farming Areas of China in 2007 49

Figure 54, Cattle Crop in Grazing Areas of China, 2000-2008 50

Figure 55, Cattle Cattle Crop by Provinces in Grazing Areas of China in 2007 50

Figure 56, Cattle Crop in Northeast China, 2000-2008 51

Figure 57, Cattle Cattle Crop by Provinces in Northeast China in 2007 51

Figure 58, Cattle Crop in Central China, 2000-2008 52

Figure 59, Cattle Cattle Crop by Provinces in Central China in 2007 52

Figure 60, Cattle Crop in Northwest China, 2000-2008 53

Figure 61, Cattle Cattle Crop by Provinces in Northwest China in 2007 53

Figure 62, Cattle Crop in Southern China, 2000-2008 54

Figure 63, Cattle Cattle Crop by Provinces in Southern China in 2007 54

Figure 64, Cattle Crop in All Cattle Zones, 2000-2008 54

Figure 65, China Beef Production by Yellow Cattle, Buffalo and Breeder & Milk Cow Displacement, 2000-2008 55

Figure 66, China Beef Production Structure by Yellow Cattle, Buffalo and Breeder & Milk Cow Displacement in 2008 57

Figure 67, China Fresh, Chilled and Frozen Beef Production, 2000-2008 57

Figure 68, Production of Low-end, Middle-end and High-end Beef in China, 2000-2008 58

Figure 69, China Low-end Beef Production, 2000-2008 58

Figure 70, China Manufactured Feed Production, 1991-2007 59

Figure 71, China Manufactured Feed Production by Animal Type in 2007 59

Figure 72, China Manufactured Feed Production (converted into complete feed) in 2007 60

Figure 73, Profits of Beef Cattle Rearing in Heilongjiang, Shangdong and Ningxia of China in 2007 70

Figure 74, Cost Structure of Beef Cattle Rearing by Backyard Farms of China in 2007 (labor cost not included) 71

Figure 75, Cost Structure of Beef Cattle Rearing by Large Farms of China in 2007 71

Figure 76, Profits of Beef Cattle Rearing by Backyard and Large Farms of China in 2007 71

Figure 77, Cost Structure of Beef Cattle Rearing by Backyard Farms of China in 2007 (labor cost not included) 76

Figure 78, Per Capita Meat Consumption Structure in United States in 2007 77

Figure 79, Beef Cattle Crop Structure by Farm Size in United States in 2007 77

Figure 80, Beef Cattle Production Cost in United States in 2007 78

Figure 81, Fresh Beef Wholeprice in United States, 2000-2007 78

Figure 82, Per Capita Meat Consumption Structure in Brazil in 2007 79

Figure 83, Beef Cattle Crop Structure by Farm Size in Brazil in 2007 79

Figure 84, Beef Cattle Production Cost in Brazil in 2007 80

Figure 85, Fresh Beef Wholeprice in Brazil, 2000-2007 80

Figure 86, Per Capita Meat Consumption Structure in Australia in 2007 81

Figure 87, Beef Cattle Crop by Farm Size in Australia in 2007 81

Figure 88, Beef Cattle Production Cost in Australia in 2007 82

Figure 89, Fresh Beef Wholeprice in Australia, 2000-2007 82

Figure 90, Per Capita Meat Consumption Structure in Canada in 2007 83

Figure 91, Beef Cattle Crop by Farm Size in Canada in 2007 83

Figure 92, Beef Cattle Production Cost in Canada in 2007 84

Figure 93, Fresh Beef Wholeprice in Canada, 2000-2007 85

Figure 94, Fresh Beef Wholeprice in China, United States, Brazil, Australia and Canada, 2000-2007 85

Figure 95, Production & Sales Value of China Beef Industry, 2000-2007 86

Figure 96, Value Structure of China Beef Industry, 2000-2007 86

Figure 97, Capacity Structure of China Beff Cattle Slaughterhouses in 2007 88

Figure 98, Production Structure of China Beff Cattle Slaughterhouses in 2007 88

Figure 99, Regional Distribution of China Cattle Slaughter Capacity, 2007 88

Figure 100, Product Structure of China Beef Industry, 2000-2007 89

Figure 101, Product Structure of Large Slaughterhouses of China in 2007 90

Figure 102, Marketing Channels of Large Slaughterhouses of China in 2007 91

Figure 103, Live Cattle Procurement Sources of Fucheng in 2007 94

Figure 104, Product Structure of Fucheng in 2007 95

Figure 105, Structure of Sales Revenue of Fucheng in 2007 96

Figure 106, Structure of Net Profits of Fucheng in 2007 96

Figure 107, Chilled Beef Production of China, 2000-2017 100

Figure 108, Frozen Beef Production of China, 2000-2017 100

Figure 109, Production of Processed Beef Products of China, 2000-2017 102

Figure 110, Production & Sales Value of China Beef Industry, 2000-2017 106

Figure 111, Product Structure of Beef Industry of United States in 2007 110

Figure 112, Production Structure of Beef Companies of United States in 2007 110

Figure 113, Product Structure of Tyson Foods in 2007 111

Figure 114, Revenue Structure of Tyson Foods in 2007 112

Figure 115, Profit Structure of Tyson Foods in 2007 113

Figure 116, Product Structure of Smithfield Foods in 2007 113

Figure 117, Revenue Structure of Smithfield Foods in 2007 117

Figure 118, Profit Structure of Smithfield Foods in 2007 118

Figure 119, Product Structure of Beef Industry of Brazil in 2007 122

Figure 120, Production Structure of Beef Companies of Brazil in 2007 122

Figure 121, Product Structure of TJBS in 2007 125

Figure 122, Revenue Structure of JBS in 2007 126

Figure 123, Profit Structure of JBS in 2007 127