Tongliao City, Inner Mongolia Autonomous Region, is an important beef cattle breeding base in China. In 2023, the number of beef cattle on hand in the city will reach 3.858 million, and the annual number of beef cattle sold will reach 1.4 million. More than half of Gacha Village in Tongliao City takes cattle raising as the leading industry, and 1.06 million farmers and herdsmen participate in the beef cattle industry chain, accounting for one third of the city's population.
Since 2022, the price of beef cattle has continued to decline, and the benefit of beef cattle breeding has declined significantly. The free range farmers have suffered losses in a large area, and the phenomenon of selling or even abandoning has occurred. The downstream industrial chain of breeding has also been impacted.
Selling price falls below cost price, which is difficult for farmers to support
"One catty is about 8 yuan, and the price has dropped a lot since the beginning of the year." Wu Quanxi, a cattle farmer in Huatougula Town, Horqin Left Banner, Tongliao City, told reporters that recently many farmers around him began to sell cows. Recently, he just sold two cows, one of which was only sold for 8000 yuan, while a year ago he was able to sell about 15000 yuan.
The reporter learned from Tongliao Agriculture and Animal Husbandry Bureau that at present, a beef cattle sold is estimated to lose more than 3000 yuan after deducting the breeding cost. The fattening cattle sold this year are generally shelf cattle purchased in the same period of 2023. The price of the cattle purchased is high. According to the feed cost, the cost of water, electricity, labor, epidemic prevention and other additional costs are not included. The break even point is 12.6 yuan per kilogram. The current selling price is about 11.5 yuan to 12.5 yuan, close to or below the break even point.
According to the data provided by Tongliao Municipal Bureau of Agriculture and Animal Husbandry, since April 2023, the price of fattened cattle has dropped from 17 yuan per catty. Up to now, the decline has reached 4.5 yuan per catty.
The reporter learned that the price of beef cattle sold by some free range farmers is lower, some even only 5 to 9 yuan per kilogram. "A good cow costs 8 yuan per catty, and an old cow costs 5 to 6 yuan per catty," said a beef broker in Tongliao.
In the face of the continuous decline in prices, beef cattle farmers have gradually turned from reluctant to sell to selling, and the number of transactions has changed from a sharp decline to a sharp increase. "Yesterday, some farmers sold all their 11 cattle for a total of 52000 yuan." Wu Quanxi said that recently, many farmers sold in groups and went to work for a living. "In our village, there are nearly 10 households jumping (selling), and more in other villages. The cows are sold as beef cattle, and the basic cows are fewer."
Jin Feng, the head of a farm in Bahutasumu, Keerqin Left Wing Back Banner, calculated a bill for the reporter. A cow's daily forage cost was 20 yuan.
Wu Quanxi told reporters that the 40 mu of land in his family was all used for planting forage, but the gap was still large. "One year later, the cost of forage is about 120000 yuan." Wu Quanxi introduced that, with the decline of cattle prices, now feeding cattle is saved. "I still have 70000 yuan of loan outstanding, and now the more I raise, the more I pay."
The reporter learned that the beef cattle market was good in the past few years. In addition, Tongliao City took beef cattle as the main industry to enrich the people and issued a number of favorable policies. Major banks sank to Gacha Village to provide farmers and herdsmen with breeding loans. Many farmers and herdsmen expanded their breeding scale through loans. After the price of beef cattle fell, most people were in a wait-and-see state and did not reduce the scale of breeding in time. Some people sold their cattle at low prices in order to relieve the pressure, and went out to work to make money. Some people raised loans to maintain their lives.
Since the market price of beef cattle is lower than the amount of insurance compensation for dead cattle, farmers and herdsmen even intentionally starved to death of cattle before. At present, insurance companies have stopped providing insurance for cattle raising, and the claim rate has declined significantly. Now it has formed a difficult situation that cattle farmers dare not raise cattle, banks dare not lend money, and insurance dare not go up.
The development of beef cattle industry is cold due to low meat prices
According to the monitoring data of the Ministry of Agriculture and Rural Affairs, on June 14, the beef price in the national agricultural wholesale market was 60.36 yuan/kg, a drop of 24% compared with the beginning of this year, falling back to the level three years ago.
A few years ago, driven by the good beef market, beef cattle industry has been regarded as the growth point of local rich farmers and modern agriculture and animal husbandry industry. Take Tongliao City as an example. Because of the good foundation of cattle raising and high acceptance of the people, the local government has taken advantage of the situation to vigorously develop the beef cattle industry in recent years, and built a relatively complete beef cattle slaughtering and processing industry chain. This time, the price of beef cattle has fallen, and the industrial chain links of breeding, breeding, slaughtering, and processing have been impacted from the breeding end to the processing and sales end.
"At present, the cold matching market is shrinking seriously." Li Yinghao, the general manager of Jingyuan Company of the national bull breeding station, said that because of the reduction of basic cows, the company's frozen semen sales volume will decline by 25% year on year in 2023, and is expected to decline by 30% in 2024.
According to the analysis of Tongliao Municipal Government, the fundamental reason for the continuous decline of beef cattle price is the imbalance between supply and demand.
The price of beef keeps falling. First, the production capacity of domestic beef cattle has rapidly increased. In recent years, the scale of beef cattle breeding in various regions has expanded rapidly. The continuous decline in milk prices has also forced some pastures to eliminate low yield cows. The eliminated cows and low yield cows are concentrated in the fattening field at a lower price, increasing the market supply; Second, the import of beef continued to grow, from 1.659 million tons in 2019 to 2.737 million tons in 2023, with an average annual growth of 13.3%. Beef deep-processing enterprises generally choose to use imported raw materials, and the frozen beef market is almost occupied by imported beef, squeezing the domestic beef market space; Third, the market demand has decreased, and the demand for beef, a medium and high-end meat consumer, is not strong. In addition, the price of pork and poultry is low, only 10 yuan and 6 yuan per kilogram, respectively, which is obviously superior to the price of beef, forming a substitute for some beef consumption.
Ma Haifeng, deputy director of Tongliao Agriculture and Animal Husbandry Bureau, said that the problems in the development of beef cattle industry in Tongliao and even in the whole country are price problems at present and superficially, and structural problems in the long run. This price fluctuation is just the external manifestation of the beef cattle industry to eliminate backward production capacity and realize industrial transformation and upgrading.
Actively respond to and guide industrial transformation and upgrading
The reporter learned that Tongliao is not only a beef cattle breeding base in China, but also a major grain producing city in Inner Mongolia. In 2023, the grain output will reach 18.9 billion jin, accounting for 23.7% of the whole autonomous region.
Ma Haifeng said that Tongliao is an irreplaceable industrial resource with both "one grain" output and "one cattle" quantity, as well as mass and business entities participating in it on a large scale. The good population structure, the national core breeding farm, nearly half of the high-quality breeding bulls in the country, the fourth level breeding promotion and animal epidemic prevention system, the influential regional public brands, together with a solid mass base, excellent breeding tradition and unique industrial climate, constitute the comparative advantages of Tongliao in developing beef cattle industry. In the face of price decline and market fluctuation, the key is to have determination and countermeasures, and transmit confidence and guide for action.
In the face of price fluctuations, Tongliao Municipal Government is actively responding, and has formulated a "1+9" package plan. It has taken a series of measures such as "keeping excellent mothers", attracting investment, brand publicity, and market expansion to boost the confidence of cattle farmers, and alleviated the pressure for the people by implementing household subsidies, loan discount, cost saving and interest reduction and other measures. It is reported that Tongliao Municipal Government requires that the industry financing entities facing temporary difficulties in operation should be fully extended, and the loans should be fully extended, so as to protect the steady operation of the beef cattle industry entities, continue to promote the high-quality development of the beef cattle industry, and give full play to the role of finance as a "stabilizer" in the sustainable development of the beef cattle industry.
(Editor in charge: Meng Junjun)
