The Philippine beef cattle industry is predominantly of the smallhold or backyard type and traditionally led by the private sector.

Commercial feedlot fattening operation emerged and proliferated on account of the huge demand for meat and meat products. Three things accounted for this great demand--the ever increasing population, changing food preferences of the Filipinos, and import liberalization.

It is, however, heavily dependent on the importation of feeder stocks coming mostly from Australia. From 1990-1999, feeder cattle importation totaled to 1,156,505 head against breeder cattle importation of only 46,213 head. However, due to very high dollar-peso exchange rate, importation decreased tremendously from 253,032 head in 1999 to only 100,109 head in 2003.

On the other hand, commercial ranches engaged in cow-calf operation are steadily decreasing in number. This is largely due to combination of factors such as poor peace and order situation in production areas, implementation of the comprehensive agrarian reform law, land use conversion, lack of domestic source of quality stock, changing policies on pasture lease, increasing input costs, poor herd and pasture management among others. This scenario shrank the country's cow-calf operations both in number and production performance.

The volume of production has been increasing from 232.34 thousand t in 1996 to 271.56 thousand t in 2000. However, since 2001 volume of production has been decreasing. In 2003, there was only 258.42 thousand t. The total output in 2003 was valued at 14.3 B.

Population Inventory

• From 1.63M head in 1990, the cattle population grew to 2.56M head in 2003.
• Top five producing regions are Ilocos, Southern Tagalog, Northern Mindanao, Central
      Visayas, and Western Visayas for 56% cattle population.
• In 2003, 93.1% of the total cattle population is found in smallholder farms; only 6.9%
      are in commercial farms.

Supply and Demand

• Demand for beef has increased over the past 10 years; to satisfy demand, at least
      500,000 head of cattle must be slaughtered annually.
• Beef supply from local production decreased from 226,305 MT in 1999 to 215,363 MT in
      2002.
• The importation of live cattle instead of beef gave the cattle feedlot industry an
      opportunity to add value of about 40% to the feeder stocks.
• Volume (32.55 thousand MT) and value P2.6B of beef imports in 2002 increased by
      10.1% and 18.2%, respectively, over the 2001 figures.
• From an average of 2 kg per capita per year, beef intake has increased to 2.81 kg.
• Market prices of beef (Metro Manila, as of July 6, 2004):
     -  beef rump: ranges from P170/kg to 190/kg
     -  beef brisket: ranges from P135/kg to P150/kg

Competitive Advantage

• increasing demand for beef; income elasticity of demand for beef higher than that for
      other meat types
• current trends in the livestock industry show that the beef cattle sector has the biggest
      potential for growth
• ability to transform low-quality and fibrous feed materials (e.g. grasses and crop
      residues) into high crop value protein food product
• abundant supply of crop residues, especially in small farms and favorable climate for
      fodder production
• availability of cattle production and meat processing technologies for increased
      productivity

Problems

• low breeding base
• high extraction rate
• absence of an organized beef cattle development and breeding program
• poor quality feeds
• non-adoption of improved husbandry practices
• unavailability of ranching areas; including squatter encroachment and land tenure
      problems in grazing areas
• inefficient marketing system and structure
• inadequate farm-to-market roads and processing facilities
• inadequate veterinary services

Interventions

• build-up of the population base and improvement of the quality of stock through a well-
      defined breeding program
• increase of animal productivity through improved husbandry practices, effective herd
      health management, and application of biotechnologies, i.e., use of multiple ovulation
      and embryo transfer (MOET) technology
• promotion of appropriate feeding technologies such as efficient utilization of crop
      residues/farm by-products with strategic concentrate and/or legume supplementation,
      use of improved forages, etc.
• strict implementation of quarantine procedures and efficient disease control/eradication
      programs
• improvement of marketing/pricing systems
• development of grades/standards for live animals, carcasses, and other animal products
• review of policies on production credit system
• advocacy program to access GATT safety net funds
• establishment of intelligence network that will monitor the world and domestic supply
      and demand situation of cattle and beef