Mainland beef prices plummet, cattle farmers suffer huge losses.

In 2024, the price of beef in mainland China has been continuously declining. Industry insiders say that the price of beef has been falling since last year and has now dropped to nearly a five-year low. The dramatic drop in beef prices has led to severe losses for cattle farmers – with a loss of 5,000 yuan for raising one head of cattle.

According to a report by “China News Weekly” on June 25, it was found that in many places, the price of beef is approaching that of pork in the Beijing market.

In a Yonghui supermarket in the Haidian district of Beijing, the price of fresh beef is 29 yuan per half kilogram, while nearby at a pork stall, premium fresh pork belly is priced at 24 yuan per half kilogram.

Wumart is the largest local chain supermarket brand in Beijing. According to a staff member at a Wumart store in Xicheng District of Beijing, currently, fresh beef tendon (specifically referring to the rump) is priced at only 31 yuan per half kilogram, whereas last year it was around 40 yuan per half kilogram.

At wholesale markets, the price of beef is even lower, mostly in the “2 yuan range”. A vendor in Beijing’s Xinfadi market stated that the price of beef is now 24 yuan per half kilogram, which is a decrease of six to seven yuan compared to the beginning of the year.

According to monitoring by the Ministry of Agriculture and Rural Affairs, as of June 21, the average wholesale price of beef in national agricultural product markets is 60.91 yuan per kilogram, a decrease of about 24% from the price of about 80.17 yuan per kilogram in January this year. Industry insiders further stated that the price of beef has been falling since last year and has now dropped to nearly a five-year low.

Zhang Wei (alias) is the founder of a chain brand for Lanzhou beef noodles in Gansu Province. He mentioned that the current price of beef is generally between 31-33 yuan per half kilogram, down by about 10 yuan from its peak. “We have a total of 100 stores nationwide. Calculated based on a daily need of 30 kilograms of fresh beef per store, we saved a whopping 5 million yuan in just the first half of the year on beef alone.”

However, while beef prices have plummeted, cattle farmers have been hit hard.

According to the China Meat Association’s calculations, about 70% of farms that raise low-end beef cattle are now operating at a loss. Some cattle farmers expressed that “raising one cow results in a loss of five thousand yuan, which is less profitable than working in the city delivering takeout.”

Lao Zhang, a cattle farmer in Jingyuan County, Guyuan City, Ningxia, has over 800 Jingyuan yellow cattle in his ranch. “Jingyuan yellow beef” is a nationally protected geographical indication brand. In previous years, the price was always over 30 yuan per half kilogram, and if sold in urban markets, it could reach over 40 yuan.

However, this year’s prices have left him exclaiming, “I haven’t seen anything like this in the past decade.” Beef tendons are priced at 15 yuan per half kilogram, small sirloin at 23 yuan per half kilogram, and snowflake beef at 27 yuan per half kilogram. “I’m losing five to six thousand yuan per cow, and the longer they are raised, the more losses I incur, with feed alone costing hundreds of yuan a month.”

According to Lao Zhang, most local cattle farmers are operating at a loss, with the difference lying in the extent of losses. Gao Guan, Vice President of the China Meat Association, also stated that about 70% of farms raising low-end beef cattle are now in a state of loss.

Beef cattle farming involves various stages such as breeding and fattening. Lin Guofa, Research Director at Bruck, stated that currently, the loss for fattening cattle sold at current prices is around 5,000 to 6,000 yuan per head. Additionally, there are significant losses in the breeding stage. Without considering the devaluation of cows, the current loss is roughly between 500 to 1000 yuan per head for raising calves. However, if considering the value of the cows, the loss could reach 3000 to 8000 yuan per head.

With the continuing decline in beef prices, many industry insiders are concerned that this may affect the stable development of the industry.

Gao Guan warned that the intensification of losses at the farming end will inevitably lead to a significant exit of farmers from the industry, thereby resulting in a decline in domestic beef production in the coming years. “It is worth noting that in some areas, due to losses in cattle farming, some farmers have started slaughtering productive cows, which will affect the stability of future beef production.”

On June 21, the Office of the Ministry of Agriculture and Rural Affairs issued a notice regarding stabilizing the development of beef cattle production. The notice stated that since the beginning of this year, the prices of live cattle and beef have been continuously declining, causing widespread losses to farming households and increasing production and operational pressures.