"Beef is expected to occupy an increasing part of the proportion now taken by pork and chicken in Chinese people's daily diet in the years to come, as the grass-fed animal's meat contains more protein, low fat and rich unsaturated fatty acids," said the Frost & Sullivan report.

Industrial experts said that the Chinese government is expected to formulate preferential policies to prop up a rapid development of fine-bred livestock farms in the country to ensure an adequate supply of high quality beef products and stimulate market demand to grow faster.

Only 1 percent of China's 47.17 million slaughtered cattle were done in finely equipped manufacturing companies in 2010, leaving the majority dealt with separately by household-sized private businesses across the countryside.

As a result, quite a few cattle farms haven't yet to undergo necessary inspections and monitoring to ensure their beef production meets relevant international quality and hygiene standards, according to the Frost & Sullivan report.

The most profitable parts of the beef industry are the slaughtering, processing and marketing. The five biggest profit earners in the industry are all located in North China.

They are Haoyue Group in Changchun, Inner Mongolia Kerchin Cattle Industry Co, Dalian Xuelong Industrial Group, Hebei Fucheng Wufeng Food Co in Sanhe and Tianjin DawnRun Beef Group.

Haoyue in Changchun, Jilin province, slaughters 500,000 cattle annually, producing various meat products totaling 100,000 tons a year.

Kerchin Cattle owns a grassland of 120,000 mu (8,000 hectares) in Inner Mongolia autonomous region, with 12,000 cattle. The company now boasts it is producing organic beef products to meet high-end market demand.

Xuelong now slaughters more than 30,000 cattle a year for beef production in Dalian, Liaoning province.

Fucheng Wufeng in Sanhe, Hebei province, saw its sales exceed 500 million yuan in 2010, of which the beef business made up 260 milion yuan. It slaughters more than 100,000 cattle annually, producing 9,000 tons of beef products, 20,000 tons of animal feed and 30,000 tons of organic fertilizer.

Tianjin DawnRun Beef acquired 80 percent of the shares of the Beidahuang Beef Industry Co in Heilongjiang province in November 2010. It is believed to be the first merger and acquisition in the country's beef producing industry and made the company a national beef producing business.

Li Jiabao contributed to this story.

bw@chinadaily.com.cn