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.

On the other hand, commercial ranches engaged in cow-calf operation are steadily decreasing in number.  This is largely due to a 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.

Nevertheless, current trends in the livestock industry show that the beef cattle sector has the biggest room for growth.  The volume of production has been increasing from 232.34 thousand t in 1996 to 271.56 thousand t in 2000 but decreased in 2001 to 261.16 thousand t.  The total output in 2001 was valued at P13.4 B.

Population Inventory

• From 1.63M head in 1990, the cattle population grew to 2.50M head in 2001
• Top five producing regions are Ilocos, Southern Tagalog, Central Visayas, Northern Mindanao and Southern Mindanao accounting for 55.6% of the total cattle population.
• In 2001, 92.8% of the total cattle population is found in smallholder farms; only 7.2% 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 increased from 173, 657MT in 1995 to 234, 272 MT in 2000 at an average annual rate of 6.29%.
• 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.  In 1999, the importation of feeder cattle totaled to 253,032 head but decreased to only 102, 478 head in 2001 due to very high dollar-peso exchange rate.
• due to economic slow down in 2001, the production volume decreased from 271.56 thousand MT in 2001 to 261.16 thousand MT in 2002.
• volume (43.88 thousand MT) and value (P2.6B) of beef imports in 2000 increased by 21% and 23%, respectively, over the 1999 figures.
• from an average of 2 kg per capita per year, beef intake  has increased to 2.81 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
• nonadoption 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 and extension 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 heath 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 funds
• establishment of intelligence network that will monitor the world and domestic supply and demand situation of  cattle and beef