December 29, 2009

The market price hike for raw milk has boosted a recovery of the dairy cow industry in China.

Fu Xiaofeng, agricultural official in Heilongjiang, said, "The price kept declining till the first half of this year. The lowest price was RMB1.89/kg (US$0.28) on average in the province. Now the price has bounced back to nearly RMB3 (US$0.44)."

Industry insiders said the price hike has made raising dairy cows profitable.

Fu noted, in the first half of 2009, 70% of dairy cow raisers suffered losses but after August, as the market recovered, one cow can produce RMB1,000 (US$146.46) of profit.

Besides the price of raw milk, dairy cows have also soared in value.

Fu said, "After the Sanlu scandal, the price for a dairy cow went down to as low as RMB5,000 (US$732). Now it costs RMB8,000 (US$1,172)."

According to official statistics, dairy cows in Heilongjiang increased from 2.2 million head to 2.36 million by the end of the third quarter.