Will beef become the new pork in China?
Certainly, pork remains the default meat for Chinese diners,
who eat more than half the world's pigmeat production, and are to expand consumption
by some 2.5% this year to 56.3m tonnes, according to the US Department of Agriculture
bureau in Beijing.
Growth is being fuelled not just by growing wealth among
consumers but by the outbreak of H7N9 bird flu, which has cut the popularity of
"China's avian influenza outbreak influences consumers away from
poultry towards red meats and fish," the bureau said.
Floating dead pigs
However, China's beef consumption looks set to rise even
faster, albeit from a far lower base, boosted by some food safety concerns over
pork too, after the discovery of more than 10,000 dead pigs dumped in Shanghai's
Huangpu river last year.
"Public health concerns continue to linger over last year's 'floating
dead pig' incident," the bureau said, adding that "there continues continue to
have a negative impact on consumer purchase decisions related to pork".
Chinese beef consumption is seen hitting a record 6.26m tonnes this year, growth of 5.1%, and
65,000 tonnes more than previously expected.
While still small by comparison with pork demand, that is
enough to place China as the world's third-ranked beef consuming country,
behind the US and Brazil.
The trend is having a big impact on the world beef trade,
with China looking abroad for now to meet its taste for beef – proving big
profits for those in the chain.
China's average beef import price last year, at $4,313 a
tonne, was an "astounding" 55% below the average retail price, which has been
rising at a rate of 30% a year, the bureau said.
It raised to 550,000 tonnes its forecast for China's beef
imports for 2014 - a 19-fold increase in three years, and promoting the country
to equal fourth (with Hong Kong) among buyers.
Canada's exports to China rose six-fold to 24,373 tonnes,
carcass weight, in 2013 although Australia is the top supplier, with a tripling
to 154,834 tonnes slaughter weight, according to Rabobank.
Last month, overall Australian beef exports set a January
record of 64,642 tonnes, "underpinned by strong Chinese and Korean demand ahead
of an early lunar new year celebrations", Vianne Lai at National Australia Bank
This demand has offset somewhat the dent to Australian
cattle prices from east coast drought, which has encouraged producers to
increase slaughter rates, which hit a 15-year high of 9.1m head last year.
"In the second week of February, slaughter rates reached
unchartered territory in eastern states as seasonal conditions deteriorated,"
Ms Lai said.
In fact, rains last week have encouraged a recovery in the
eastern young cattle indicator - Australia's benchmark pricing index, to 311.25
Australian dollar cents a pound, up 15.75 cents week on week.
The index a month ago hit a four-year low of 278.5 cents a
However, China's beef demand looks likely to have an
increasing impact on feed markets too, as the country's domestic industry grows.
"Producers are utilising abundant corn and alfalfa supplies
to support their expanding beef production," the bureau said.
Already the country imports more than half its 1.5m tonnes
of alfalfa supplies, mainly from the US.
Given that cattle require roughly 50% more feed per
kilogramme of weight gain, compared with pigs, the impact on grain demand, and
market sensitive corn imports, could prove significant too.