The substitution effect of grass-fed livestock products on grain-fed livestock products from the perspective of supply-side reform in China

Clarification of the direction of China’s future agricultural structural transformation is important, particularly by analysing the dynamic characteristics of upgrading the food consumption structure, especially the relationship between grain and grass-fed livestock products, and by predicting future food consumption patterns. Based on the food equivalent unit (FEU) and the arable land equivalent unit (ALEU), characteristics of meat consumption elasticity across China and between regions were analysed using the extend linear expenditure system for national meat consumption elasticity and regional changes. Similarly, in addition to the substitution effect of grass-fed livestock products on grain-fed livestock products, the prediction of the future gap in demand for grass-fed livestock products was explored. Results indicated that: (1) from 2005 to 2012, the per-capita food consumption on average has stabilised at 460 kg FEU per year. The consumption of grain-fed livestock products is stable, and that for grass-fed livestock products has increased dramatically since 2000; (2) there is a substitution effect of consumption of grass-fed on consumption of grain-fed livestock products on individual and regional scales; (3) By 2035, the overall demand gap for future grass-fed livestock products in China will be 1.14 × 1010 kg, and the main demand will be in grain farming areas. Based on the aggregated advantage index of each region, the seven grassland ecological-economic regions are divided into three priority groups for grassland agricultural development.