US beef imports facilitate local industrial upgrade, says insider

Industry insiders say instead of killing domestic products, U.S. beef brands have stimulated their Chinese rivals to upgrade industry and pursue technological progress.

U.S. products entered China’s market last month as the country resumed beef imports, allowing them to be sold for between 100 yuan ($15) and 300 yuan per kilogram for now.

Beijing consumers think the imported beef is a little bit expensive, but it is ok to consume occasionally. Domestic beef is generally priced at 70 to 90 yuan per kilogram.

A spokesperson for Wumart, a leading retailer in Beijing, said the first batch of beef products transported by air was aimed at medium and high-end markets; promising a 50-per cent price reduction in future deliveries by sea.

Foreign beef sold in China is mainly from Australia, Uruguay and New Zealand, with a total import volume of 825,000 tons in 2016.

Data indicates that U.S. beef entry into China will effect changes to the domestic consumer market and pose challenges to the production and sale of local beef.

According to beef feedlot owners in Heilongjiang, northeast China, beef price has dropped by 5 percent in five straight months.

A beef broker, Han Baogang, thinks the price drop is mainly because of seasonal demand and the fall in prices of pork and poultry.

Industry insiders say though the impact of U.S. beef will not be evident in the short term, the shortcomings of small-scale livestock farming in China should not be overlooked.

Poor management creates low profits and such situation is vulnerable to risks, says an animal husbandry and veterinary service official from Longjiang County, Heilongjiang.

Some feedlots in Heilongjiang province have begun taking measures to raise efficiency and reduce costs such as introducing beef cattle from New Zealand and Australia to produce crossbreeds. The high-end beef produced via this practice is sold at over 400 yuan per kilogram. Other feedlots are partnering meat producers to boost efficiency and profitability.

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