March 15, 2004



China To Buy 20,000 Diary Cows From New Zealand


China's fast-growing dairy industry is expected to buy more than 20,000 dairy cows from New Zealand this year.


Two of three shipments, totalling close to 10,000 cows, have already left Timaru for China, and another shipment of about 4000 leaves this month.


Dairy industry sources estimate more than 20,000 New Zealand cows will be shipped to China this year, markedly more than previous years. China has also bought from the Australian dairy herd.


New Zealand farmers are being offered $900 for two-year-old in-calf heifers, $150 more than current domestic values, although the cows have to be of high quality.


Several companies are involved in the trade, with Auckland-based AEL Bloodstock one of the larger players.


Company representative Harold Cleland declined to comment, other than to say the company had exported animals throughout the world, including dairy cows to China, for more than 20 years. The issue is sensitive with few people wanting to be quoted.


The Otago Daily Times reported the market had been helpful for New Zealand farmers given current low demand and prices for dairy cows.


It meant farmers could sell their "second-best" cows for well above market rates, one source said.


But some farmers said they had reservations they could be helping establish a future competing exporter.


Other sources described the Chinese buyers as having specific requirements: cows with proven breeding and production pedigree, and only friesian cows with features particular to the breed, such as four white feet and a white switch on their tail.


Selected cows were electronically tagged, and tested for avian and bovine TB and a host of other diseases.


The South Island cows are kept on a quarantine farm near Geraldine, vaccinated and pregnancy-tested before being shipped from Timaru.


A Fonterra spokesman said China was the world's fastest-growing market for milk and milk products, with consumption rising 10 per cent a year for the past decade, reaching over 7kg a person in 2001.


The average international consumption of dairy products is 100kg a person.


To meet that burgeoning demand, dairy companies are building factories, with more than $200 million being invested in infrastructure this year, and importing cows.


A Fonterra spokesman said most of China's six million dairy cows were in the country's eight northern provinces.


In comparison, New Zealand farmers milk about 3.7 million cows.


China is Fonterra's fourth-largest customer, with annual sales of $300 million, and Fonterra is in discussion with China's largest milkpowder producer, Shijiazhuang Sanlu Group, about a joint venture.