China Ships in Dairy Cows as Demand for Milk, Products Rise

BEIJING, Jan. 10 -- China is importing more dairy cows to try and beef up its transition to larger scale farms, as the industry attempts to boost production and quality following a deadly scandal.

China plans to nearly double milk production to 64 million tonnes by 2020, as part of a long-term plan by the Ministry of Agriculture to improve nutrition for the world's largest population. Its 7.0 million cows now produce about 38 million tonnes.The dairy industry has a long way to go, after 300,000 babies were sickened and at least six killed in 2008 after farmers and middlemen mixed poor quality milk with melamine, a chemical formed from coal, to cheat protein tests.

"There is rising demand for milk, while the domestic dairy cow herd is not enough and milk yield is low," said Chen Lianfang, a senior analyst with Beijing Orient Agri-business Consultant Co. Ltd.

Following the melamine scandal, demand for milk plunged and Chinese dairy exports were shunned. Small farmers slaughtered their cows as about 40 percent of small-sized farms shut.

New breeding stock are now in heavy demand as the government promotes big and modern dairyfarms to replace many backyard breeders.

Dairy cow imports in 2011 reached 100,000 head in 2011, Chen estimated, up from 80,000 head the year before. The lion's share comes from New Zealand and Australia, with Uruguay the third country from which imports are allowed.

That poses a problem since dairy herds in those three countries tend to be pasture-fed. China lacks fertile, rich pastureland and is instead developing large-scale farms where cows are kept in barns and fed fodder.

"After the melamine incident, the dairy industry treats quality and better dairy cows as a priority," said Dou Ming, who publishes "Holstein Farmers", a Chinese magazine.

"Many large dairyfarms, with more than a thousand head each have been built or planned."

Demand for genetic stock developed for barns helped lift imports of bull semen from the U.S. alone to $4.74 million in 2010, up from $2.7 million in 2009 and a mere $714,000 in 2008, according to the U.S. Department of Agriculture.

China has suspended live cattle imports from Europe and North America since 2006, due to mad cow disease.

China's per capita milk consumption is less than 30 kilogrammes a year, compared with the world's average of 89 kg. Europeans drink an average of 225 kg of milk.

Many Chinese are lactose intolerant but the government envisions better nutrition by promoting nationwide consumption of milk or yoghurt. China's premier, Wen Jiabao, has famously encouraged students to drink a glass of milk a day.

"Only by speeding up the construction of modern dairyfarms can we meet growing demand for good-quality milk by the nation," vice minister of agriculture Gao Hongbin told state media.

Farms with at least 100 cows will ultimately account for 38 per cent of Chinese dairyfarms, Gao said.

Big farms have been built in Inner Mongolia, the country's largest milk producing region, and Heilongjiang in the northeast.

Hebei province, the epicentre of the melamine scandal in 2008, now only allows farms of 100 head or more.

Nearly 2.0 million small holders with four cows or less still accounted for 75 percent of Chinese dairyfarms in 2009. But their number has fallen while the number of dairyfarms with 1,000 cows or more rose by 56 per cent in 2009 compared with 2008, according to USDA data.

Their inexperience and lack of ability to buy expensive, good quality fodder, keeps the milk yield at small farms at 2,000 to 3,000 kg per 300-day lactation, much lower than the 8,000 to 9,000 kg typical of a New Zealand cow.

China's average milk yield is about 5,000 kg, lower than the world's average of 6,000 kg.

Sinofarm Genetics & Seed Co Ltd, last month imported 2,200 Holstein dairy cows and 392 Jersey cattle from New Zealand, to expand its herd and raise the quality of milk output. Published by HT Syndication with permission from The Financial Express. For any query with respect to this article or any other content requirement, please contact Editor at htsyndication@hindustantimes.com