Trending News

Blog Post


China seeks to exploit the milk market however does not have sufficient cows By Reuters 


© Reuters. Cartons of milk are displayed on cabinets at a grocery store in Beijing, China Could 19, 2021. REUTERS/Thomas Peter


By Dominique Patton

BEIJING (Reuters) – China has come to crave milk. Demand that had been steadily rising has spiked additional after docs touted its well being advantages amid the coronavirus pandemic and dairy companies throughout the nation have launched into a farm-building frenzy.

However quenching that thirst will likely be problematic, not least as a result of discovering the tens of millions extra cows wanted for deliberate new and expanded farms will likely be difficult.

China is the world’s third-largest milk producer, however final 12 months’s 34 million tonnes of output solely met about 70% of home wants. Complicating issues are feed prices at multi-year highs, whereas land and water are additionally in brief provide, making the nation a pricey place to supply milk.

Spurred on by close to document highs for uncooked milk costs and authorities subsidies, simply over 200 new Chinese language dairy farm initiatives have been introduced final 12 months, in accordance with consultancy Beijing Orient Dairy.

Its evaluation reveals that 60% of the brand new initiatives have set their sights on 10,000-plus cows and in whole the plans name for some 2.5 million cows – roughly half of China’s present milking herd – to be added within the coming years.

On the face of it, China’s dairy market, value some $62 billion in annual gross sales, is ripe for growth. The federal government has closely promoted milk and its advantages – partially to assist the agricultural dairy trade – boosting consumption. Even so annual per capita consumption is simply 6.8 litres in comparison with 50 litres for america, in accordance with Euromonitor Worldwide.

“Common per capita consumption remains to be very low,” Gao Lina, the CEO of China Trendy Dairy Holdings Ltd informed Reuters. “The potential is big.”

She mentioned Chinese language folks, particularly youngsters, have begun consuming extra cheese which is able to additional inflate demand. A kilogram of cheese typically requires 10 kilograms of milk to make.

Milk in China is, nevertheless, nonetheless thought of particular sufficient to be a well-liked present. Contemporary milk prices about $2 a litre, roughly double UK and U.S. costs, whereas the extra frequent 240 ml packs of room temperature UHT milk price about 40 cents.

Demand for recent chilled milk particularly, which constitutes only a fifth of milk gross sales in China, has proven fast development, climbing 21% within the first 11 months of 2020 versus 10.9% for room-temperature milk, in accordance with Nielsen knowledge.

To fulfill that demand, large gamers might want to develop extra uncooked milk sources nearer to wealthier inhabitants centres, analysts say.


Companies outlining grand plans embrace Trendy Dairy, which needs to double its herd over the following 5 years to 500,000 by shopping for up smaller farming firms and constructing new farms.

Shanghai-based processor Shiny Dairy and Meals Co Ltd goals to construct 4 extra farms so as to add 31,000 cows to its 66,000-strong herd. China Youran Dairy is planning an IPO, in search of as much as $800 million to develop its breeding herd and improve milk output.

Based on Beijing Orient Dairy, new Chinese language farms needing a complete of 1.35 million cows are already beneath development, however a few of these must sit empty.

It estimates that over the following two years, China’s home herd will generate about 500,000 new heifers whereas imports might are available at round 400,000 if the tempo of imports stays the identical as final 12 months when China imported virtually 200,000 heifers, largely from Australia and New Zealand.

Importing heifers is the quickest approach to inventory a brand new farm, shaving a couple of 12 months off the time it will take to breed the inventory at dwelling. Imports are additionally most well-liked because the cattle are free from the various ailments circulating in China’s herd.

However clouding that outlook has been New Zealand’s resolution in April to halt exports inside two years attributable to issues in regards to the welfare of livestock on ships for lengthy durations.

“We now have been inundated with inquiries, particularly as New Zealand stops the commerce,” mentioned an Australian cattle exporter who declined to be recognized, including that the surging demand from China is encouraging graziers to spend extra on breeding.

Chile and Uruguay additionally export small volumes, however transport instances are twice as lengthy and the breeds used produce much less milk, making them much less enticing choices.

Brazil, america and European international locations might develop into good sources of breeder cattle, mentioned Dou Ming, chief economist at Beijing Orient Dairy.

“If we simply added two extra import international locations, we would be high quality,” he mentioned.

China and america pledged to begin talks on imports of breeder cattle inside a month of the Part 1 commerce deal signed in Jan. 2020 nevertheless it stays unclear if the discussions have begun.

The workplace of the U.S. Commerce Consultant, China’s Ministry of Commerce and Normal Administration of Customs didn’t reply to requests for remark.

Feed prices, nevertheless, current one other obstacle, analysts and trade sources say, as imported heifers take time earlier than they develop into milkable cows.

Corn costs are at document ranges, whereas hay/grass can be set to develop into costlier because it competes for acres with corn, mentioned Grant Beadles, China supervisor at Land O Lakes, which provides feed and forage seed to the market.

($1 = 6.4496 )

Cow milk output by nation

Cow milk consumption by nation

Milk-producing cows by nation

Cow milk output by nation (Interactive)

Milk-producing cows by nation (interactive)


Supply hyperlink

Related posts

Leave a Reply

Required fields are marked *