Abstract
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.
| 
View Cart
