The livestock industry holds immense significance as it directly influences the economy and the well-being of the populaceThe robust development of this sector is intimately linked to the availability of meat and dairy products that populate the markets and the dinner tables of families across the countrySince the era of reform and opening up, China's livestock production has steadily improved, establishing itself as a cornerstone of the agricultural and rural economy, transitioning from a sideline endeavor for families to a vital industry.

However, it's crucial to recognize that the livestock sector faces substantial challenges in recent years, and achieving high-quality development will require considerable effort and innovation to overcome these obstacles.

The imbalance between supply and demand has become more pronounced, impacting various livestock marketsThis year, aside from a notable recovery in the hog market, the state of other livestock products remains subdued

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Data from the Ministry of Agriculture and Rural Affairs indicates that while the pig farming industry has returned to a profitable equilibrium thanks to market adjustments and capacity control, other sectors are still strugglingFor instance, the wholesale price of lamb dropped to 59.02 yuan per kilogram in July, a 7.58% decrease from the previous year, accumulating a decline of nearly 27%. Similarly, prices for beef and fresh milk have seen a significant decrease, with beef and dairy prices declining by 12.1% and 12.5% respectively during the first half of the yearBy the third week of August, the national average price for beef was reported at 68.43 yuan per kilogram, reflecting a year-on-year decline of 16.5%. Some farmers find themselves trapped in a dilemma, facing the harsh reality of either selling at a loss or incurring further losses by keeping their livestock unsold.

The primary drivers behind these challenges stem from increased supply coinciding with weakened demand, leading to a temporary imbalance in the supply-demand framework

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In 2023, China imported a staggering 12.82 million tons of livestock products valued at 45.19 billion dollars, with meat and its derivatives accounting for over half of that figureIn stark contrast, exports have only shown sluggish growth, with sporadic declinesGiven that domestic prices significantly exceed international market prices, the increase in imported meat is directly affecting the domestic price structure.

Taking the beef sector as an example, China produced a total of 7.53 million tons of beef in 2023, supplemented by over 2.7 million tons of imports, resulting in a total exceeding 10 million tonsFurthermore, as bilateral and multilateral free trade agreements strengthen, certain trade policies have gradually relaxedFor instance, Argentina lifted all restrictions on beef exports in 2024, which led to a remarkable increase in shipments to China, with May seeing a 22% rise in beef imports

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Consequently, while demand remains tepid, this has contributed to an oversupply situation.

As per capita GDP crosses the 10,000-dollar mark, growth in meat consumption shows signs of slowing and stabilizingWhen it reaches 20,000 dollars, the per capita consumption of meat and fats is projected to decline within the food consumption structureData reveals that China's per capita GDP stood at 12,600 dollars in 2023, suggesting that future growth in meat consumption may remain limited, rendering it ineffective to solely rely on demand-side solutions for addressing the surplus supply.

The immediate focus must shift towards enhancing cost-efficiency and productivity within the livestock sectorThe quality of livestock industry development, as well as its competitiveness, hinges not only on supply stability but also on the overall quality of the industry and its resistance to risks

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While ensuring supply is foundational, the ongoing health and sustainability of the industry depend on improving industry quality and bolstering resilience against various challenges.

One discouraging factor is that China's livestock production costs surpass those of other leading producersAmong the top ten global livestock-producing countries, China's pork industry ranks eighth in terms of per capita yield, with its production technology reaching only 61% of that in Germany, falling below the global averageAlthough the beef and sheep industries rank third and second respectively, there remains a 20% to 25% gap between production techniques and those of leading countries, indicating a pressing need for enhancements in productivity.

Low feed conversion rates further hinder China's livestock sector from achieving cost advantagesCurrently, feed conversion efficiencies for ruminants in China lag over ten percentage points behind those of developed nations

Additionally, the prevailing feed formulation primarily composed of "domestic corn and soybean meal" fails to meet current nutritional requirements and proves costlyHence, technological advancements may be pivotal in driving down costs and increasing efficiency in the livestock industry.

Enhancing brand development is another crucial aspect of promoting high-quality development in the livestock sectorAs consumer lifestyles evolve with rising standards of living, there is an increasing demand for high-quality livestock products that are both safe and of superior taste and nutritional valueUnfortunately, the current livestock industry considerably lacks in quality supervision and brand establishment, highlighting the necessity for ongoing improvements to align with market expectations.

On one hand, the prevalent model of small-scale family farming presents significant challenges

Many of these units lack the scientific management necessary for disease control, feed use, and overall operational efficiency, ultimately affecting the quality and safety of livestock productsA considerable factor contributing to the low pricing of livestock products stems from the predominance of small producers yielding homogeneous products without secure sales channels, rendering them powerless to negotiate against aggressive pricingIn sharp contrast, processed meat products that are well-packaged and of higher quality tend to have stable pricing, showing minimal fluctuations compared to freshly slaughtered or frozen meats.

On the other hand, insufficient research on brand theory and methodology, particularly about brand identity, development pathways, and benefit-sharing models, results in ineffective livestock branding in some regionsCertain local enterprises are disinclined to utilize regional public brands, stunting the sustainable development of livestock branding

Furthermore, quality concerns regarding livestock brand products warrant attentionData from the National Agricultural Market Research Center highlights a high rate of negative consumer feedback on regional poultry and livestock brands across major e-commerce platforms, primarily focusing on issues of freshness, flavor, cutting standards, and inconsistency in quality.

Fostering competitive advantages is essential as the livestock industry continues to encounter substantial resource demands and environmental challengesParticularly in a resource-scarce nation such as China, enhancing competitiveness within the livestock sector must build upon heightened productivity while addressing deep-rooted industrial challengesFocusing strategically on technological advancements and strengthening the industry chain must be pivotal in driving comprehensive policies.

Increased investment in technology, alongside a commitment to improving the competitiveness of the livestock sector, is essential

Key priorities should emphasize breakthroughs in breeding, reducing dependence on imported breeds and fodders, cultivating unique livestock varieties, and promoting species that thrive in local conditions to improve both the quality and quantity of livestock productsEnhancing capacities for technological innovation and its practical application can lead to reduced production costs through optimized breeding techniques, improved feed conversion ratios, and increased prevention of epidemics.

A concerted effort toward the coordinated development of the entire livestock industrial chain can enhance multifaceted benefits and bolster resilience against risksBy leading with primary enterprises, smaller producers can unite, fostering an expanded industry chain to improve market outcomesIncentives for large enterprises to leverage their strengths in breeding technology, feed formulation, and equipment can promote an integrated operational model encompassing everything from breeding to slaughtering, processing, and distribution