肉牛：大周期、大周期、大周期

Summary of the Conference Call on the Beef Cattle Industry Industry Overview - The beef cattle industry is experiencing significant capacity reduction due to deep losses in 2024, leading to the culling of young and pregnant cows. The trend of capacity reduction is expected to continue into 2025, albeit at a slower pace. The southern regions have seen an 8% decline in cow inventory, with some areas experiencing reductions of up to 30% [1][2][3] - The supply of calves has noticeably decreased, with calf prices doubling at the beginning of 2025, indicating a future tightening of beef supply [1][2] Key Supporting Factors for the Beef Cattle Cycle 1. Capacity Reduction: The domestic beef cattle farming industry has faced supply shocks, leading to the culling of inefficient cows and the introduction of new breeding stock. The trend of culling continues into 2025, with calf supply significantly reduced [2][3] 2. Global Price Transmission: Major beef-producing countries like the US, Brazil, and Australia have also undergone capacity reductions. The CME live cattle futures price has doubled since 2020, and this global price increase is transmitted to the domestic market, supporting domestic beef prices [2][3] 3. Policy Support: The Chinese government is implementing measures to protect domestic farming, including an investigation into import safeguards that has affected import volumes, allowing the domestic market time to adjust [3] Market Conditions for 2025 and Beyond - In 2025, there will be a shortage of calves but an adequate supply of fattened cattle and finished meat. The impact of previous capacity reductions has not fully materialized, leading to a continued influx of cow meat into the market [4] - The price uptrend is expected to officially begin in 2026, with prices anticipated to rise significantly due to the effects of the severe capacity reduction in 2024, continuing through 2027 and possibly into 2028 [4] Characteristics of the Beef Cattle Industry Chain - The beef cattle industry chain includes upstream feed, midstream fattening and slaughter, and downstream consumption. Feed costs account for 50%-70% of farming costs, with a long growth cycle and low breeding efficiency [5] - The industry is characterized by low concentration, with the top 50 companies holding a small share of total inventory [5] Global and Domestic Meat Trade Dynamics - The top ten beef-producing countries account for 87% of global production, with the US being the largest producer at over 12 million tons. China produces around 8 million tons but still imports approximately 2.8 million tons, primarily from South America [6] - China's demand significantly influences global trade structures, with Brazil being the largest supplier, followed by Argentina and Australia [6] Cost Disparities in Beef Cattle Farming - Domestic beef cattle farming costs are significantly higher than in Brazil due to factors such as scarce pasture resources and high feed and labor costs. Domestic costs range from 10,000 to 20,000 yuan, while Brazilian costs are between 5,000 to 8,000 yuan [8] - The low level of industrialization and efficiency in domestic beef production contributes to these high costs [7][8] Historical Price Trends - Since 2000, domestic beef prices have generally trended upward, with a notable decline in 2023 due to increased supply and reduced consumption growth. This marked the first historical price drop, with inventory levels declining for two consecutive years [9] Current and Future Supply-Demand Situation - Domestic per capita beef consumption remains low compared to countries like Japan and South Korea, indicating significant growth potential. The consumption of high-quality beef is growing faster than that of regular beef, with premium varieties seeing growth rates of up to 30% [10] Investment Opportunities - The current phase represents a critical price turning point in the Chinese beef cattle market. Companies such as YouRan MuYe, China Shengmu, and Modern Farming are recommended for investment due to their ability to generate cash flow through the culling of dairy cows and their growth potential in the beef market [11][12]