Beef price rise fails to spur farming: lacking policy support, raising cattle is worse than raising pigs

On the morning of January 18, Boss Chen came to the Administrative Service Center of Renhua County, Shaoguan City, to handle the last formality, "once it's done, I can get the business license."

Boss Chen has raised more than 170 head of beef cattle. If all were sent to market, their current value would be nearly 6 million yuan. But to actually eat the beef, it will still take 1 year. In fact, Boss Chen previously knew nothing about raising cattle and had no connection to farming or animal husbandry at all. Early last year, in his fifties, he left Shenzhen and returned to his hometown in Renhua to start a second business venture, and what he set his sights on was the ever-rising "King of Cattle."

By 2013, it was already the 12th consecutive year of rising beef prices nationwide. Starting early last year, beef prices across the country soared all the way: from April 2012 to the end of the year, the national beef price rose 35% year on year. Even in Gansu and Henan, major beef cattle farming provinces, beef prices rose more than 30% year on year. But a Yangcheng Evening News reporter's investigation found that although beef prices kept rising sharply, cattle farmers were few and far between. Among beef cattle farmers in Guangdong, enterprises with more than 100 head in stock are already few, and those with more than 1,000 head are even fewer, with the beef self-sufficiency rate less than 40%. So where exactly is the difficulty in raising cattle?

Large investment, high costs, yet the returns are hardly ideal

Raising cattle is far more tiring than running a factory

"Early last year, yellow beef market price was only a bit over 20 yuan/jin, and now it has risen to 38 yuan/jin; during National Day last year it once rose to 42 yuan/jin." Boss Chen told the reporter that he hopes in a few more years his own beef cattle stock can reach 1,000 head.

Led by Boss Chen, after driving about half an hour out of Renhua county town, the reporter arrived at his cattle farm. Workers were crushing fresh green grass just cut from the fields, and the whole cowshed was filled with the scent of grass. Boss Chen took the reporter around to inspect his "cattle army," saying, "this is a Limousin, this is a Simmental..." while affectionately patting the cattle on the head and rubbing their ears. Boss Chen told the reporter that these feeder cattle (beef cattle over 12 months old) bought from Shandong are all fine European breeds, much larger than local yellow cattle, "each can grow to 1,500-2,000 jin."

Starting in early 2012, Boss Chen invested 4 million yuan one after another to build this cattle farm. "To raise beef cattle on a large scale, the investment threshold is quite high; it is basically impossible for local farming households to invest!" Boss Chen did the accounts for the reporter: "Shandong is the main production area for feeder cattle nationwide. Buying one feeder cow from Shandong costs me 10,000 yuan, and 170 head means 1.7 million yuan. There is also all kinds of fixed investment in sheds and facilities. From September last year to now, I have been very lucky; the cattle are all healthy and almost every one has grown to 1,200 jin, but it will still take nearly 1 year before they are ready for market, and during this period it is all pure input."

Upfront investment is high, and the cost of raising cattle is not low either. The reporter learned that cattle basically eat only green grass, and one cow requires the output of two or three mu of land, so cattle farms must rely on large areas of pasture. Once there is land, people still have to be found to cultivate it... Boss Chen said that in order to care for these cattle, he hired 16 workers and 1 professional technician, and wages alone come to about 30,000 yuan per month; adding grass seed, fertilizer and land rent, one cow costs at least 3,000 yuan a year, and that does not even include unexpected expenses.

Boss Chen told the reporter that from feeder cattle to final market, one cow takes 1.5 years, sells for 37,000-38,000 yuan/head, and making a net profit of 4,000-5,000 yuan/head is already good. "So I plan to increase returns in three ways. First, after becoming familiar with cattle-raising techniques, buy calves to raise; one only costs 1,400-1,500 yuan, and in half a year it can be raised into a feeder cow, lowering costs by about 6,000 yuan. Second, after learning to raise young cattle, buy breeding bulls and cows to produce calves, saving that 1,500 yuan too. Third, let farming households raise cattle for me for one year; calculating two people caring for 4 cattle, I buy the whole output, they can net 10,000 yuan/head a year, and I can hire fewer employees."

But overall, Boss Chen still sighed that it was too hard: "Much harder than running a factory in Shenzhen back then! Work starts at 7 in the morning and does not finish until eight or nine at night, and earning 500,000 yuan a year is already very good..."

Another large cattle-raising household in Renhua raised more than 300 head of beef cattle, including imported cattle and local native yellow cattle. The boss, Mr. Zhong, told the reporter that they raise cattle purely "in passing." "We mainly produce tea seed oil and have tens of thousands of mu of land in hand. Grass can be planted in the gaps between tea trees, so we can be said to have an innate advantage, and cow dung can also be used as fertilizer. Because several industries are done together, the costs are hard to calculate in detail. By rough estimate, we net only about a thousand yuan per cow. Raising cattle specifically has not been considered."