China's beef prices have fallen to a five-year low in recent years as domestic production has increased and imports have also risen.

According to Bloomberg on Wednesday (July 3, 2024), the current wholesale price of beef has fallen 18% from last year's high to around 62 yuan per kilogram. Most cattle farmers are losing money. And the situation has become more difficult due to the influx of meat from overseas. In the first five months of this year, China's beef imports increased by 23%.

According to China News Weekly on July 3, dairy analyst Song Liang pointed out that the price of beef is mainly determined by supply and demand factors. From the perspective of demand, Chinese beef consumption has not changed significantly. On the contrary, it has been steadily increasing in recent years. The price reduction of beef is mainly caused by excessive supply.

Gao Guan, vice president of the China Meat Association, told reporters that China's domestic beef production has increased rapidly in recent years, and a considerable part of the increase in beef comes from dairy cows that have been eliminated for meat. Since last year, due to the slower-than-expected recovery of China's dairy market, the price of raw milk has continued to fall, resulting in a large-scale loss and withdrawal of the dairy farming industry, which has accelerated the elimination of dairy cows.

The intensification of losses on the breeding side will inevitably lead to the large-scale withdrawal of farmers, which will lead to a decline in China's domestic beef production in the next few years. It is worth noting that some areas have begun to slaughter breeding cows due to losses in cattle breeding, which will affect the stability of future beef production.