Key Points
- USDA has forecasted China’s beef production will reach 7.7 million tonnes in 2024.
- Average beef wholesale prices in China settled down at 72.5 yuan/kg towards the end of September.
- Despite a stable projection for beef consumption in 2024, demand for high-quality imported beef is expected to persist.
- Brazil continues to dominate China’s beef imports with a 41.1% market share in 2023.
Production Trends
The United States Department of Agriculture (USDA) says China’s beef production could grow by 2.7% in 2024, to 7.7 million tonnes – an all-time high. This increase is due to a large live cattle inventory. The live cattle inventory has grown because of the increase in domestic beef herd.
However, this rate of growth could be moderated due to a slowing economy, which is likely to flatten consumer demand for beef.
Pricing Dynamics
Chinese wholesale beef prices were relatively stable in Q1 of 2023, peaking at 78.6 yuan/kg. After hitting the peak, the prices cooled down, and bottomed out at 70.8 yuan/kg, before stabilising in recent weeks.
As of the last week of September, the average beef wholesale price stood at 72.5 yuan/kg, marking a 6% decrease compared to the same period last year. This trend is likely a result of a well-supplied market and diminishing demand.
Consumption Patterns
The USDA anticipates that beef consumption in China will remain flat in 2024, totalling around 11 million tonnes. A slowing economy is expected to lead consumers to opt for lower-end domestically produced beef products over high-end imported ones.
Despite this, out-of-home services like hotels, restaurants, and institutions are predicted to continue being the major outlets for beef consumption in China. Additionally, online beef sales are expected to gain traction, particularly for chilled products.
Import Landscape
Data for 2023 (January to August) shows that China imported 1.8 million tonnes of fresh and frozen beef, which is a 6% increase compared to the same period in 2022. Brazil remains the leading supplier, contributing 735,000 tonnes so far in 2023.
As consumer demand stabilises, a decline in beef imports is expected.
There remains a demand for premium-quality beef particularly from countries like the United States, New Zealand, and Australia, which have successfully etched a place in both retail arenas and the high-end out-of-home services sector.
China continues to be a significant player in the global beef market, ranking as the world’s third-largest beef producer.
Although growth in consumption is expected to plateau due to economic factors,China would still maintain substantial import volumes from various nations to serve its diverse domestic markets.
These trends have implications not just for China but also for the global beef market, affecting supply, demand, and pricing dynamics.
