January 10, 2012

 

 

China plans to nearly double milk production to 64 million tonnes by 2020, from the current 38 million tonnes produced by the country's seven million cows, the Ministry of Agriculture said.

 

"There is rising demand for milk, while the domestic dairy cow herd is not enough and milk yield is low," analysts said.

 

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

 

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

 

Dairy cow imports in 2011 reached 100,000 head in 2011, 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.

 

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

 

"Only by speeding up the construction of modern dairy farms can we meet growing demand for good-quality milk by the nation," vice minister of agriculture Gao Hongbin said.

 

Farms with at least 100 cows will ultimately account for 38% of Chinese dairy farms, 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 two million small holders with four cows or less still accounted for 75% of Chinese dairy farms in 2009. But their number has fallen while the number of dairy farms with 1,000 cows or more rose by 56% in 2009, 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.

 

The country is importing more dairy cows to try and beef up its transition to larger scale farms.

 

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.