China cattle production to decline
High cattle prices and government policies encouraging production resulted in cattle herd growth for several previous years. With the economy facing headwinds and low dairy and beef prices persist, motivation in the sector is wanting. In 2023 and 2024, the increased cull of dairy cows exacerbated the situation and put greater downward pressure on beef prices.
Industry sources indicated that low cattle prices have resulted in losses for the majority of cattle breeders, especially small breeders with around 10 head of cattle. Although there is some continued consolidation in the market, especially the dairy cattle market, Post expects the tendency for farms to grow larger in size will continue but many will be operating at a loss despite their increased efficiencies and farm management improvements. As a result, the 2024 ending / 2025 beginning cow stocks and 2025 calf crop will decline.
In June, 2024, the Ministry of Agricultural and Rural Affairs (MARA) published the “Notice on Stabilizing the Development of Beef Cattle Production and Implementing Support Policies”. The notice effectively is MARA's effort to put in place supply management controls to stabilize beef cattle supplies. Measures in the notice include directives that local governments should organize and implement projects such as expanding the cow herd and improving the quality, improving grain-to-feed conversion, and providing subsidies for livestock breeding in pastoral areas.
Main beef cattle producing areas should actively seek local policy support to increase support for farms, especially cow farms; they should actively seek support from financial institutions, to increase loan issuance. Other parts of the notice call for officials to strengthen monitoring of the beef cattle inventory, breeding cow inventory, and the number of newborn calves. Analysis of the notice encourages industry to eliminate old and low-yielding cattle to optimize the herd structure and improve production efficiency.
Post revised the 2024 calf production estimate lower as low cattle prices seem to be incentivizing producers to grow more animals. This is leading to an even lower inventory and smaller calf production.
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