China’s domestic beef output is declining as domestic demand is growing, and the industry is falling behind its global counterparts in various key elements of the business such as productivity, farm management, breeding, and feed resources. Beef imports skyrocketed for the world’s biggest meat consuming nation in 2013 as shipments almost quadrupled year on year to 300,000 metric tons according to Rabobank. The bank forecasts that China will see beef imports grow by 15%-20% in the next five years but the real volume of beef coming into the country may actually double because of smuggling. Beijing has increased support for the beef industry in an attempt to increase output, but not enough, and cattle farmers are transitioning to other agribusinesses leaving industry majors scrambling to source beef. There are indications that China is changing its stance on beef imports. The country is expected to lift its ban of Brazilian beef within the year and open its market to U.S. beef within the next two. Currently Australia is China’s main supplier of beef with 52% of the market in the first five months of 2014 however, this source is being threatened as well because of drought.
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