Beef price up on low supply

As beef prices have continued to rise, contributing to the high rate of inflation, China should announce a series of measures including more subsidies to boost cattle supply, an industry leader told the Global Times Wednesday.

The average beef price nationwide has been high over the past months compared with last year, with average daily prices in mid-January up 30 percent over the same period last year, according to recent reports by regional media including the Guangzhou Daily.

"A shortage of beef supply is the main cause of rising beef prices," Gao Guan, deputy secretary-general of the China Meat Association, told the Global Times Wednesday.

Gao noted that farmers and cattle farms have become hesitant about raising cattle because the industry is facing increased feeding costs. The costs have gone up due to a variety of factors, which include rising prices of grain and labor as well as a lack of good pastures.

The feeding period for adult cattle lasts three to four years, which Gao said takes much longer than raising poultry or pigs.

"The overall feeding cost has increased around 30 percent in 2012 year-on-year," a sales manager surnamed Wang at Shandong Jiayang Livestock Development Co told the Global Times Thursday.

Wang's company raises calves and sells them to cattle farms. The sales price of one calf is around 2,600 yuan ($417) this winter, much higher than 1,500 yuan last winter, according to Wang.

The government gave Wang's company a subsidy of 200 yuan for each calf they raised, but Wang said the subsidy fell far short of covering the rising costs.

A lack of government support is another cause of lower motivation for farmers to raise cattle, which leads to a declining supply of beef, said Gao of the China Meat Association, adding that the association he works for has already submitted suggestions for supporting cattle cultivation to the Ministry of Agriculture.

The government has given stronger support to pig cultivation because pork accounts for a larger percentage of total meat consumption, and rising pork prices would contribute even more to a high rate of inflation, said Gao.

Beef and mutton account for around 10 percent of Chinese people's meat consumption at present, coming behind pork at 65 percent and poultry at 21 percent, according to Gao.

"But in recent years consumption of beef and mutton has been rising and pork has been declining as consumers prefer meat with lower fat," Gao said.