Beef and Mutton Prices Rose for 13 Consecutive Years, So Why Did They Fall Back in the Peak Season?

Beef and mutton prices fell in some pastoral areas, with “difficulty selling sheep” appearing

Recently, the persistently soaring beef and mutton prices in some areas showed a phenomenon of falling instead of rising during the peak consumption season. According to monitoring, in the fourth week of October, the price of mutton in pastoral areas such as Inner Mongolia and Xinjiang was 57.34 yuan per kg, down 6% year on year; the price of mutton in farming areas was 65.68 yuan per kg, up 2.2% year on year. Among them, mutton prices in pastoral provinces had fallen for 10 consecutive weeks week on week and had been lower than the level of the same period last year for 7 consecutive weeks, which is uncommon in the peak consumption season of previous years.

⟦NL> Wang Zongli, deputy director of the Animal Husbandry Department of the Ministry of Agriculture, analyzed that the decline in mutton prices in pastoral areas was the result of multiple overlapping factors. First, in recent years the benefits of meat sheep were good, large-scale breeding developed faster, and the supply of mutton on the market increased. But affected by the slowdown in macroeconomic growth, mutton market consumption has declined since last winter. Second, after the outbreak of peste des petits ruminants in spring, various places suspended the cross-provincial and intra-provincial transport of live sheep and closed live sheep trading markets. After the resumption of live sheep transport, the cattle and sheep previously held back from the market were concentrated for sale, and some farmers even panicked and sold off their stock. Furthermore, since the beginning of this year, precipitation across Inner Mongolia has fallen 18% year on year, grassland output has been severely reduced, and herdsmen have stored relatively little grass. To reduce the pressure of storing forage for the winter, farmers and herdsmen chose to speed up sales, causing meat sheep to flood the market. In addition, increased imports also had a certain impact on the domestic beef and mutton market.

Nationwide, since the beginning of this year, beef and mutton prices have not continued the upward trend of previous years, and the year-on-year price increases have narrowed significantly. Experts analyzed that this situation was due on the one hand to increased production, and on the other hand to the impact of weak consumption. According to monitoring of 17 large wholesale markets including Xinfadi, in the first 10 months the trading volume of beef fell 11.7% compared with the same period last year, and the trading volume of mutton fell 19.2%.

Beef and mutton supply is still in a tight balance, and prices have risen for 13 consecutive years

In recent years, China's cattle and sheep production has continued to grow steadily. In 2013, national beef and mutton output was 6.732 million tons and 4.081 million tons respectively, up 31.2% and 54.5% from 2000, with average annual growth of 2.1% and 3.4%.

Compared with production development, consumption grew even faster. In recent years, the share of beef and mutton in the meat consumption structure has remained at about 13%. In 2013, urban and rural households nationwide purchased 3.961 million tons of beef and mutton. Compared with 2.404 million tons in 2000, annual average consumption growth was 3.9%, and supply falling short of demand drove prices to rise continuously. Starting in 2001, beef and mutton prices rose for 13 consecutive years. Among them, from 2007—2013 the upward momentum was relatively strong, with beef prices rising 17.9% annually on average and mutton prices rising 18.7% annually on average.

Wang Zongli said that although the upward momentum of beef and mutton prices has slowed somewhat since the beginning of this year and mutton and live sheep prices in some areas have declined in stages, as residents' living standards continue to improve and dietary structure adjusts faster, increased beef and mutton consumption is a major trend. The pattern of tight supply will not fundamentally change in a short period, and prices will not fluctuate greatly. Developing production and increasing supply is the primary task for the development of the cattle and sheep industry at present and for a period to come.