STATUS OF BEEF INDUSTRY IN MALAYSIA

STATUS OF BEEF INDUSTRY OF MALAYSIA  has been discussed for long. Agriculture has been identified in this world as an important component in achieving the Millennium Development Goals of the World Bank by 2015 (United Nations, 2009). The high dependence of the majority of the rural citizens for their livelihoods on agriculture is very clearly observed in many countries, including Malaysia. Many of the agriculture-for development agendas are being planned and implemented which have the goals of making a difference in the economy and well being of the people living in the rural areas (The World Bank, 2008). The various economic development corridors planned for the northern and east coast regions of Peninsular Malaysia and the Sarawak and Sabah economic growth areas are examples of such a development approach. Malaysia has attained self-sufficiency levels (SSL) in poultry meat, eggs and pork since the middle of the 1990s. The achievement of both poultry and pig industries in meeting more than the domestic demand for poultry and pig products is driven principally by the efficient assembly of the two major inputs of grow-out animals and feed, both of which are available locally and competitively priced. Unfortunately the ruminant industries lack these important inputs of breeding stock and feed in sufficient quantity and at reasonable cost for an efficient production of beef, mutton and milk. Blog "Anim Agriculture Technology'' discussed about the status of beef industry of Malaysia based on a study by authority.

Beef production is one of Malaysia’s important agricultural industries. This is evident from the increasing trend in the total economic value of the beef industry as reflected partially in the beef consumption value. Beef consumption has been on an increasing trend especially in the post independence era when the nation experiences steady economic prosperity through the expansion of the manufacturing and oil palm plantation sectors. Greater proportion of the beef consuming communities today are including beef in their domestic budget compared to the pre independence period. Although beef demand is not directly responsive to increase in consumer income, the response for beef for some income groups is likely to be significant and positive (Hudson and Vertin, 1985). From a meta analysis it was shown than increasing family income would shift a greater budget share towards beef (Gallet, 2010). The beef consumption in this country is made up of meat from cattle and buffalo. However domestic production of beef from cattle and buffalo has not kept pace with the ever increasing demand for fresh beef and processed beef products. Many strategies have been proposed to boost beef production but thus far these developmental initiatives have yielded small contribution to the domestic beef supply. There has been an increase in the gross economic value of the beef industry from RM697 million in 2008 to RM2.51 billion in 2013 comprising of the value of domestic output and imported animals and meat. There is a tremendous scope of further expanding the beef cattle industry in view of the low self-sufficiency level of beef which has hovered from 24% in 1990 to 25.67% in 2013. At current demand for beef, one percent increase in self-sufficiency level would require an additional slaughtering of about 14,000 head of cattle per year. By 2020 the government has targeted to raise the self sufficiency level of beef to 32.7% in which translates in the slaughter of more than 450,000 head of cattle each year. This review attempts to examine the shortcomings faced by the beef industry in Malaysia and identify potential areas where the commodity is most likely to improve.

Over 2013 - 2022 the Organization for Economic Co-operation and Development (OECD) and International Monetary Fund (IMF) have projected growth prospects for OECD area to be relatively slow at 1.9% per annum. For the other non-OECD countries the economic prospects in the medium term are expected to improve to average above 2.2 % p.a. Malaysia is forecast to grow above 5% p.a. in term of Gross Domestic Product (EPU, 2013), lower than those of potential main drivers of future world economy: China (7.6%) and India (6.7%). The world population is expected to grow at a slower rate of just 1% in the next decade and this is envisaged to happen in all regions. Developing countries however are expected to continue the fastest population growth with Asia as a whole growing at over 2% p.a. Malaysia continues to see its population growing from 28 million in 2014 to above 40 million in 2020. Such population prospects and dynamics besides being major determinants to future national economic environment also affect both the supply and demand of agricultural commodities. While many developed economies continue to experience weak demand for agricultural commodities and high unemployment, inflation is expected to remain low at an average 2.1% p.a. However inflation is expected to be of major concern in many emerging economies, especially in high growth countries with inflation rate between 5-6% are expected for China, India and Brazil. Competitiveness of export commodities and affordability of importing countries for agricultural produce are strongly influenced by exchange rate. 

Certain dynamic economies will drive down the value of their currencies, making some to be more competitive in global trade. Domestic consumption of beef Beef is an important source of animal protein in Malaysia and consumed by more than 60% of the population. It has enjoyed a steady demand over the years with total consumption climbing by 45% from 138,980 tonnes in 2005 to 201,556 tonnes in 2013 whereas mutton and chicken surged higher to 69% and 77%, respectively, over the same period. Per capita consumption of beef also saw a rise from 5.32 kg in 2005 to 6.74 kg in 2013  an increase of 2.97% p. a. over the 9-year period (Table 1). In comparison per capita consumption of chicken meat rouse higher at 6.06% p.a. over the same period with per capita consumption of chicken meat of 46.49 kg per capita in 2013 which was about 6.9 times more than beef. However there are many importers of frozen beef who are filling in the more than 70% shortfall in the domestic supply by bringing in beef of differing price and quality from India, Australia and New Zealand. In 2013 86% of the beef imported into Malaysia was sourced from India as buffalo meat owing to the relatively cheaper price and availability of buffalo meat compared to chilled and frozen beef from Australia and New Zealand. Fifteen percent of the domestic beef consumption was supplied from live cattle purchased from Australia and Thailand. Food manufacturers, either involved in the restaurant business or food processing, would often purchase beef based on customer requirement and price. Similarly homemakers who form the majority of the retail consumer block decide to purchase beef based largely on price and quality.

Within the livestock sector in Malaysia the beef sub-sector lags in percentage contribution to domestic supply of red meat. Many attempts in beef production in the past, from extensive ranching to intensive feedlotting, have yielded variable results in sustaining the beef industry. The targeted self sufficiency level of beef of 33% by 2020 entails the annual slaughter of 0.7 million cattle. Existing beef smallholdings are characterized by their small herd size (less than 10 head), low production inputs, lacking in husbandry innovations and poor marketing network, and adoption of KK cattle as the breed of choice. With 5.2 million hectares of oil palm of various ages Malaysia has the input endowment to maintain a sizeable population of a million breeding cows created from the existing cattle population of 0.75 million head as well as through importation of selected breeding stock assembled in an integrated beef and palm oil production system. Besides the once valuable buffalo is an important genetic resource often neglected and can be harnessed to compliment the domestic beef supply. Smallholder dairy enterprises could be promoted to generate dual produce strategy of milk and feeder cattle for fattening. Oil palm byproducts such as palm kernel cake and oil palm fronds have the potential to fully feed cattle and buffalo in semi-intensive cow-calf production and intensive feed lotting of feeder cattle and buffalo. Strengthening the value chain from breeding stock use to marketing of animals and retail products is a much needed approach to promote and expand the beef industry in this country. Thanks...

By,
M Anim,
Kangar, Perlis,
Malaysia.
January 2021.