Cattle farming takes a long time to break even and has high entry barriers, leaving the industry's development in a predicament

An industry insider joked that the cattle farming business is like "a child neither father nor mother cares for."

Last year, the province's 2011 beef cattle slaughter volume was only 1.26 million head, with very few "10,000-head cattle farms."

Raising cows is hard to profit from, while calves are in short supply and fetch high prices

Sai Deyin, chairman of Zhongxiang Saiyu Animal Husbandry Development Co., Ltd., has been "dealing with cattle" since childhood. Ten years ago, Sai Deyin began to realize that cows across the entire cattle farming industry were gradually decreasing, and would certainly become a scarce resource in the future. Entering early might mean unlimited business opportunities.

In 2002, Sai Deyin rented a piece of land in Zhongxiang City and purchased 1,000 cows. According to his vision at the time, he planned to gradually develop into a "10,000-head cattle farm" within a few years and become the largest cow breeding farm in the province. However, after 10 years, Sai Deyin not only failed to realize his dream, but could not even recover his capital. He told this newspaper reporter dejectedly that the past ten years had been extremely difficult, and he was now considering withdrawing.

Among all the problems, the foremost is that raising cows is hard to profit from. Sai Deyin did the math for the reporter: at this year's prices, purchasing a cow about 2 years old costs 8,000-10,000 yuan. Cows are single-birth animals, which simply means they can only give birth to one calf at a time, and from successful mating to the birth of a calf takes as long as 285 days.

That is not all. After a calf is born, it cannot be sold immediately for cash. "It must be raised for one to one and a half years, until it reaches over 200 kg, before it can be sold as a feeder cattle to downstream fattening farms." With good market conditions this year, a 200 kg calf can sell for 6,000 yuan. It takes 4 years to breed two feeder cattle to recover 12,000 yuan. "This does not even include the feed, labor and other costs for the cow and raising the calf. If all are added in, it takes 4 years just to break even."

National beef cattle numbers dropped by over 10 million head in 4 years

It is not just calves that are in tight supply. Xu Shangzhong, president of the Cattle Industry Branch of the China Animal Agriculture Association, previously said in a media interview that national beef production dropped from over 7 million tons in 2010 to over 6 million tons, and beef cattle inventory and slaughter volume fell by more than 10 million head in nearly 4 years. Director Guo of the Provincial Animal Husbandry and Veterinary Bureau admitted that the province's beef cattle inventory has also declined by 3%-5% in the past two years.

Data from the Hubei Provincial Animal Husbandry and Veterinary Bureau shows that in 2011, the province's beef cattle inventory was over 3 million head, with a slaughter volume of 1.26 million head.

Zhang Zhaoxin, director of the Industry and Technology Research Office of the Rural Economy Research Center under the Ministry of Agriculture, explained that the slow expansion of the beef cattle industry group is determined by the population characteristic of slow cattle breeding.

Earlier, beef was cheap because most of the beef citizens ate came from cattle raised in rural areas. "Farmers raised cattle to plow fields, and slaughtered and sold them at a certain age, without calculating labor and feed costs."

Now those raising cattle are generally elderly people left behind in villages. In addition, as rural mechanization continues to increase, cattle's plowing role has been replaced, which has also led to their being culled in large numbers.

Lu Guojian, a Henan native who has been in the beef cattle business in Wuhan for over a decade, has long purchased cattle in Hunan, Guizhou and other places. He sighed that three years ago he had already discovered that cattle sources were "depleting." "These past two years have been worse year after year. If this continues, in 5 years, yellow cattle will become 'national treasures.'"

Large-scale commercial beef cattle farming lags behind

Monitoring by the Provincial Animal Husbandry and Veterinary Bureau shows that fattening one beef cattle can yield a profit of about 2,000 yuan, a year-on-year increase of over 80%. However, many farmers do not consider this an easy business.

On the one hand, raising cows takes too long to break even; on the other hand, the high entry threshold also discourages many farmers. Xinzhou farmer Wang Zhenyang's farm has a beef cattle inventory of about 500 head. He introduced that the various costs for one cattle are as high as about 12,000 yuan, including 6,000 yuan for purchasing feeder cattle, 3,500 yuan for feed, 500 yuan for labor, 1,200 yuan for loan interest, and so on. "Setting aside land rent and factory construction costs, it still takes over 5 million yuan to get started." By this calculation, one cattle purchased as a calf and raised to slaughter yields about 2,000 yuan in profit after deducting costs.

Under such high capital requirements, farmers generally face difficulties in obtaining loans. "Livestock cannot be used as immovable property collateral, and the land is rented, making it very difficult for enterprises to secure financing loans," said Sai Deyin.

Chen Hongsong, deputy director of the Hubei Provincial Animal Husbandry and Veterinary Bureau, once publicly stated that large-scale farming in the cattle industry lags several years behind poultry.

It is reported that in 2013, our province will further support specialized breeding stock farms and strive to increase the inventory of basic breeding stock by 10%. However, an industry insider predicted that the supply-demand contradiction for beef cattle will be difficult to ease within 3-5 years.