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| Both the national economy and the income of urban and rural residents rose quickly in the past decade, and the dairy industry gained a substantial development thanks to Government promotion, mobilization from the processing industry, consumption and export demand, and rising of residents’ conscience on nutrition and health care. China grew into a big dairy country from one that was short of milk. The national cow milk output rose from 6,011,000 tons in 1997 to 35,127,000 tons in 2007, and dairy cattle inventory from 4,265,000 to 13,879,000 during the same period of time, up by 2.25 folds and 4.84 folds respectively. And, the yield of the whole herd rose from 1,409,000kg to 2,531,000kg, up by 79.58%. Mengniu and Yili, the two largest dairy companies in China, saw over 20 billion yuan of yearly sales revenue in 2008, and are in the world top 20 of dairy companies from the perspective of scale. In general, China’s dairy industry went through a track of quantity expansion in the past decade, whereas there are lots of deep-rooted contradictions and problems, which are mainly (1) low percentage of elite dairy cattle breeds and poor milk yield level. In 2006, the dairy cattle inventory was 13.632 million in the nation, of which pure-breed Holstein cattle around 35%, lots of the Holstein cattle reared in the crop producing regions and pastoral regions are cross breeds between Holstein and local cows, making up around 35-40%. In addition, there are 2 million dairy/beef cattle reared in Inner Mongolia and Xinjiang for both milk and meat purposes, including Xinjiang Brown Cattle, Grassland Red Cattle, Sanhe Cattle, Simmental and etc., and the cow yield is less than 2,000kg. China Holstein pure breed, the mainstream breed of dairy cattle in China, has a big gap with developed countries in various production performance indicators, and the milk yield (4,100kg average cow yield) is merely 60% of the world advanced level. The percentage of elite breeds is poor, Holstein pure-breed cattle and local cross breeds aggregate less than 80% of the total. Breeding capability with special characteristics is at a low level, some places even suffer from degradation. (2) Low scaled farming level and backward feeding methods. Dairy farming is based on smallholder farmers, and 80% of the dairy cattle in the nation are reared by farmers with inventory less than 10. (3) Poor ratio of quality coarse feed. The composition of dairy cattle feed is not based on a scientific formula, and the conventional feed for most of the cattle is coarse feed based on corn stalk. There is lacking of quality coarse feed, specially quality alfalfa or other fodder. This restrains further improvement of production performance of dairy cattle and is a crucial factor for nutrition metabolism diseases. (4) Poor raw milk quality and low procurement standard. Neither the physical nor the chemical indices or the hygienic indices of raw milk quality is ideal, the hygienic indices of raw milk are worrisome and related standards can hardly meet the international norms. (5) There is high incidence of primary diseases of dairy cattle, and epidemic control, quarantine or supervision system is outdated. Alongside the rising of “popularity of dairy cattle” nationwide in recent years, there has been “popularity of cattle trading” as well. There are outbreaks of cattle tuberculosis, Paratuberculosis and Brucelliasis in certain places in China, and there is a trend of proliferation. (6) The development of dairy farmers’ cooperatives is outdated, becoming a bottle neck of the sustainable development of the dairy industry.
2008 saw the outbreak of the “Sanlu infant’s formula milk incident” or “melamine incident”. The national dairy industrial chain was seriously affected, and the incident was attributable to raw milk. After the incident, smallholder farmers confronted with unprecedented difficulties and elimination by the market. Also after the incident, the dairy cattle inventory fell noticeably, dropping to 13 million in the end of 2008, and there was a further shrinkage to 12 million in the first quarter of 2009. The dairy farming industry in China is about to see a profound restructuring. Since the melamine incident in 2008, the Government has strengthened regulating and administration over the whole dairy industrial chain, especially regulating and administration over dairy farming has reached an unprecedented level. Among the policies and regulations promulgated by the Government, the representative ones are the “Administrative Rules of Dairy Product Quality, Safety and Supervision” and the “Food Safety Law”. The melamine incident resulted to pacing up of the transition of China’s dairy farming mode, i.e., shifting from extensive quantity expansion to scaled and intensive farming with quality and efficiency.
By far, the dairy industry has grown from small to big, however, compared with the mature dairy industry of developed countries, China’s dairy farming industry is still at an infant stage and should learn from the advanced countries. The dairy farming industry of China has a huge demand for foreign resource thanks to the accelerated transfer of farming mode and the related profound reform. Based on concrete data, this report illustrates the current status and the trend of the dairy farming industry of China after a study on the whole dairy farming chain in the past decade and especially after the melamine incident. This report is composed by the top think tank of China’s dairy industry, and is a rare reference for companies, institutions or researchers who wish to benefit from the huge development opportunity of China’s dairy farming industry after the melamine incident.
Table of Contents 1. Overview of China’s Dairy Cattle Industry
2. Policy Analysis of Dairy Farming 2.1 Supervision Rules 2.2 Revival Outline 2.3 Regulating Market Order of Raw Milk 2.4 Regulating Pricing Mechanism of Raw Milk 2.5 Subsidy on Elite Breeds 2.6 Subsidy on Agro Machinery 2.7 Import Control of Animal Products 2.8 Raw Milk Procurement Standard 2.9 Food Safety Law 2.10 Medium/long Term Development Plan of Dairy Cattle Industry (2009-2013)
3. Technical Analysis of Dairy Cattle Farming Industry 3.1 Embryo and Biotechnology 3.2 DHI Performance Test 3.3 Gender-control Technology 3.4 Dairy Cattle Identity Coding System and Breed Registration Software 3.5 Genetic Evaluation Methods of Breeding Holstein Cattle in China
4. Analysis of Supply of Dairy Cattle Industry 4.1 Dairy Cattle Inventory (by breeds, inventory scale and region) 4.2 Milk Output (total output, yield (by breed and region)) 4.3 Import of Dairy Cattle 4.3.1 Live Cattle 4.3.2 Frozen Semen 4.3.3 Embryo 4.4 Dairy Cattle Price and Pricing Mechanism
5. Analysis of Demand of Dairy Cattle Industry 5.1 Analysis of Food and Nutrition Demand of Chinese Residents 5.2 Analysis of Demand for Raw Milk by Dairy Processing Industry 5.3 Trend of Changes of Consumption Structure of Dairy Products 5.4 Impact on Raw Milk Demand from Policy on Consumption Stimulation by Enlarging Domestic Demand
6. Analysis of Marketing Environment of Dairy Cattle Industry in China 6.1 Trading Market of Dairy Cattle and Genetic Materials 6.1.1 Procedure and Control of Importation of Dairy Cattle and Genetic Materials 6.1.2 Suppliers of Dairy Cattle and Genetic Materials (with and without license) 6.1.3 Price and Pricing Mechanism of Dairy Cattle and Genetic Materials 6.2 Trading Market of Raw Milk 6.2.1 Pricing Mechanism of Raw Milk 6.2.2 Raw Milk Prices (smallholder price, farming zone price and scaled farm price) 6.2.3 Role of Milk Stations in Raw Milk Pricing 6.2.4 Government Influence on Raw Milk Price
7. Analysis of Dairy Cattle Related Industries 7.1 Feed (forage grass, daily mixed feed, etc.) 7.2 Milking and Other Facilities 7.3 Vaccines
8. Analysis of Cost-Benefit of Farms of Different Scales 8.1 Smallholders 8.2 Small-scale Farms 8.3 Medium-scale Farms 8.4 Large-scale Farms 8.5 Super-large Farms 8.6 Cost-Benefit of Farms of Different Scales 8.7 Dairy Farming Scale Modes Suitable to China
9. SWOT Analysis of Dairy Farming of Different Farming Modes 9.1 Smallholders 9.2 Farming Zones 9.3 Dairy Farmers’ Cooperatives 9.4 Milk Unions 9.5 Self-owned Farms 9.6 Trend of Dairy Farming Modes in Future
10. Analysis of Epidemics of Dairy Cattle Industry 10.1 Epidemics of Dairy Cattle 10.2 Geographical Distribution of Dairy Cattle Epidemics 10.3 Policies and Regulations Coping with Dairy Cattle Disease
11. Impacts from Melamine Incident and Financial Crisis to Dairy Cattle Industry in China 11.1 Impact on Trend of Dairy Cattle Price and Raw Milk Price 11.2 Decline of Dairy Cattle Inventory and Milk Output in Short Period of Time 11.3 Abandoning of Low-yield Cows, Improvement of Yield 11.4 Heightening of Entry Threshold of Dairy Cattle Industry 11.5 Acceleration of Transition to Scaled, Intensive and Quality Efficient Farming 11.6 Slowing Down of Development Speed of Dairy Cattle Industry to Conventional Rate 11.7 Supervision over Raw Milk Market Being Standardized 11.8 Quality Standard of Raw Milk Gradually Meets International Norms and Improves Rapidly 10.9 Brand Promotion Becomes Important Feature of Dairy Cattle Industry
12. Analysis of Investment Opportunity of Dairy Cattle Industry 12.1 Capacity of Market Demand 12.1.1 Quality Fodder 12.1.2 Live Cattle 12.1.3 Frozen Semen and Embryos 12.1.4 Vaccines 12.2 Milking and Other Equipment 12.3 Farm Management Software 12.4 Raw Milk Test Equipment 12.5 HR Training (managers and technicians)
List of Tables Table: Status of China’s Dairy Cattle Industry in the World, 2000-2008 Table: Status of Dairy Cattle Industry in National Economy, 2000-2008 Table: Provincial Output of All Sorts of Milk, Per Capita Possession Volume and Rank, 2006-2008 Table: Provincial Cow Milk Output, Per Capita Possession Volume and Rank, 2006-2008 Table: Provincial Dairy Cattle Inventory in End of Year, Possession by Per Ten Thousand People and Rank, 2006-2008 Table: Provincial Output Value of Dairy Industry, 2005-2008 Table: Income of Dairy Farmers of Main Producing Provinces, 2005-2008 Table: Provincial Quantity of Dairy Farmers and Average Scale, 2005-2008 Table: Percentage of Scaled Dairy Farming and Mechanized Milking of Various Provinces, 2006-2008 Table: Raw Milk Procurement Price of Different Provinces, 2003-2008 Table: Layout of Different Dairy Farming Scales of Different Provinces, 2007-2008 Table: Counties (districts) or Cities of County Level with Milk Output above 100,000 Tons, 2007-2008 Table: Dairy Cattle Inventory (by herd and adult cows) of Main Cities (regions) of Prefecture Level, 2006-2008 Table: Milk Output (by gross output and yield) of Cities (regions) of the Prefecture Level, 2006-2008 Table: Milk Output (by gross output and yield) of Main Counties (districts) or Cities of the County Level, 2007-2008 Table: Geographical Distribution of Scaled Dairy Farming Enterprises Table: Geographical Distribution (by dairy cattle breed, inventory and yield) of Scaled Farming Enterprises (zones) with Inventory above 100 in Different Provinces Table: List of Domestic Companies That Obtained Production/Operational License of Frozen Semen and Embryos (by dairy cattle breed, inventory, quantity of frozen semen and embryos) from the Ministry of Agriculture Table: List of Foreign-funded Companies That Obtained Production/Operational License of Frozen Semen and Embryos (by dairy cattle breed, inventory, quantity of frozen semen and embryos) from the Ministry of Agriculture Table: Equilibrium of Raw Milk, 2007-2009 Note: the above list of tables are part of the content of this report. |