The USDA’s Foreign Agriculture Service office in Beijing said in a Global Agricultural Information Network report that China’s rapid economic growth over the past decade means beef consumption has expanded significantly.
Beef is considered a high-end product and is the most expensive protein on the market, the FAS said.
LIMITED PRODUCTION
Restrained by its limited domestic production, China must import growing quantities of beef from partners around the world, the FAS said. Starting with imports of less than 0.3 million tonnes in 2014, China imported 2.78 million tonnes in 2023, a ninefold increase, valued at $14.4 billion.
While the rate of growth in beef imports has cooled since 2022, analysts projected that mild growth is likely to continue over the next decade, the FAS said.
Currently there is a high inventory of beef in the market, the FAS said, so continued competition with lower-priced imports, like those from Brazil and Argentina, is expected.
In 2023, the US was the fourth largest exporter of beef and beef products to China, totaling $1.5 billion, the FAS said. Because of its premium quality, US beef is primarily used in hotels and restaurants for preparation of high-end food service products.
However, there is room for further expansion into retail channels, the FAS said. For example, Sam’s Club imports and sells a significant amount of US retail muscle cuts. And, online retailers, including JD.com, one of China’s largest, was said to be exploring direct-to-consumer sales of US beef.
BEEF FAVORED
Beef is favored by Chinese consumers for multiple reasons, including nutrition, the FAS said. Broadly regarded as a nutritional and healthy animal protein, it is preferred by families with kids or elderly for extra nutritional care.
Secondly, being high in price makes it a favorable option for less-price-sensitive occasions such as weddings or business banquets, the FAS said. Additionally, its versatility of use, including for western steak, Korean barbecue, Chinese hot-pot and traditional Chinese stewing and deep-frying makes it an interesting option for consumers.
China’s demand for imported beef and beef products is likely to continue growing, although not as robustly as a few years ago, the FAS said. China’s Ministry of Agriculture and Rural Affairs forecasted in the latest China’s Agriculture Outlook Report that China’s beef demand will maintain an average annual growth of 2.8% over the coming 10 years, the FAS said. China’s imports could reach 3.5 million tonnes by 2032.
That is the result of several factors, the FAS said. The slowing economy is hurting consumption and restraining growth, while the desire for varied sources of animal protein.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $189.73 per cwt to $197.20, compared with last week’s range of $189.82 to $200.00 per cwt. FOB dressed steers, and heifers went for $298.86 per cwt to $302.65, compared with $294.97 to $301.45.
The USDA choice cutout Thursday was down $6.13 per cwt at $309.46 while select was down $3.48 at $279.72. The choice/select spread narrowed to $29.74 from $32.39 with 141 loads of fabricated product and 38 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $340.68 per cwt, and 50% beef was $73.38.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.40 to $1.56 a bushel over the Dec corn contract and unchanged in Kansas at $0.25 over Dec, which settled at $4.27 1/2 a bushel, up $0.01 1/4.
The CME Feeder Cattle Index for the seven days ended Wednesday was $249.92 per cwt, down $0.80. This compares with Thursday’s Nov contract settlement of $247.65, down $0.05.