May 23, 2012

Elders firm says not enough Australian dairy source for China

Elders, an agribusiness company, says that there are not enough dairy heifers from Australia to supply China's increasing demand for 2012.

For the second consecutive year, a record shipment of 100,000 cattle will sail from dairies in Australia, New Zealand and Uruguay.

They're going to modern intensive dairies in China, where dairy consumption is expected to double in less than 10 years.

But group general manager of Elders International, Tony Dage, says Elders has to fill the boats with heifers from other countries.

"It's a bit of a struggle. Elders International will supply about 30,000 head of dairy heifers into China, about 30% of the market," he said.

"We're only able to do that because we can source very good quality cattle from three procurement points: South-eastern Australia, New Zealand and Uruguay. We see more cattle coming from those countries."

China has allocated a trillion dollars to expand agricultural production, as it aims to be 80% self-sufficient in food and agriculture over the next decade.

It's subsidising modern, intensive farms, and underwriting the cost of importing new genetics to scale up production.

China's domestic dairy industry is trying to recover after the contamination scandal in 2008, when poisonous melamine was added to dairy products in a crude attempt to boost protein levels.