Economic evaluation of beef cattle production systems in China

The livestock industry in China has undergone massive changes since the liberalisation of markets started in 1985. The beef sector is no exception to this transition with production and consumption increasing faster than all other meats in the last two decades. The number of cattle has nearly doubled since 1980 to be around 141.6 million in 2005 and beef production has increased at a much faster rate than the cattle inventory. As the third largest beef producing country in the world, China exports and imports beef cattle. The emerging Chinese market has generally been seen as an opportunity for the Australian red meat industry. However, given the rate of increase in output, China may also provide a threat. With this in mind, understanding the current beef cattle industry situation in China is of great importance. The central objective of this paper is to evaluate the economic returns on China’s beef cattle operations and to analyse their implications for beef cattle industry development. In this paper, three beef cattle production systems are compared and examined across three geographical regions. Statistical methods are employed to evaluate these production practices. The results reveal the shifting balance between demand and supply in China and shed light on China’s trade behaviour. Possible opportunities for Australian beef industry participants to explore the Chinese market are also discussed.