Do­mes­tic dairy pro­duc­ers de­spair amid surge in im­ports

China Daily (Canada) - - FRONT PAGE -

Group Co Ltd at the start of 2013, the do­mes­tic dairy gi­ant still stopped col­lect­ing milk from her farm at the end of last year, and she is now con­sid­er­ing a law­suit against Yili for breach of con­tract.

A ma­jor part of that in­vest­ment was 500,000 yuan spent on a set of im­ported feed pro­cess­ing equip­ment, as re­quired by Yili un­der the con­tract.

The busi­ness used to have 800 cows but most of that herd has now been sold, leav­ing her just 170 an­i­mals. Chen Ji­ayun, one of the 13 farm­ers in­volved in the col­lec­tive, has sold 38 of her cows, from the orig­i­nal 73.

“Rais­ing cows is as hard as rais­ing a baby,” said Chen. “You have to be re­ally care­ful about hy­giene and feed.”

Her story is be­ing mir­rored by thou­sands of milk pro­duc­ers across China, as sales prices fall well be­low breakeven point, she said.

Be­fore the 50-year-old was forced to start sell­ing her cows, the cost of feed each day was around 3,330 yuan. The 1 met­ric ton of milk she took from the an­i­mals daily brought her around 3,000 yuan.

The milk in­dus­try cri­sis is par­tic­u­larly se­ri­ous in prov­inces like Shan­dong, He­bei and Qing­hai, said in­dus­try sources.

As an in­creas­ing num­ber of dairy com­pa­nies start to re­duce or halt their col­lec­tion of fresh milk, many farm­ers there are be­ing forced to pour their milk down the drain or even have their dairy herds slaugh­tered.

And while do­mes­tic farm­ers find it in­creas­ingly hard to sell their fresh milk, the im­port of dairy prod­ucts has con­tin­ued to grow

Ac­cord­ing to the Gen­eral Ad­min­is­tra­tion of Cus­toms, the coun­try im­ported 320,000 tons of liq­uid milk in 2014, up 70 per­cent from the pre­vi­ous year. Im­port of milk pow­der ex­clud­ing in­fant for­mula rose 9 per­cent year-on-year to 930,000 tons, and that of in­fant for­mula in­creased to 121,000 tons in 2014, roughly the same level as a year ear­lier.

About 27.7 per­cent of the im­ports were from theNether­lands, fol­lowed by 14.1 per­cent from Ire­land, 13.5 per­cent from France, 10.3 per­cent from Den­mark and 8.6 per­cent from New Zealand. The five coun­tries ac­counted for 74.2 per­cent of to­tal for­mula milk pow­der im­ported last year.

Li Li­uhang, direc­tor of the Shan­dong pro­vin­cial dairy man­age­ment of­fice, said the prices of fresh do­mes­tic milk have been drop­ping monthly since Fe­bru­ary last year and now sit at around 4.5 yuan per kg on av­er­age. The prov­ince, with 1.25 mil­lion cows and to­tal out­put of 2.71 mil­lion tons, is the coun­try’s fifth-largest milk pro­ducer.

Of­fi­cial fig­ures show raw milk prices re­main sta­ble at larger farms but small-scale op­er­a­tions have suf­fered, with prices fall­ing as low as 1 yuan per kg in some re­gions.

Chen Rong­wei, deputy direc­tor at the China Dairy In­dus­try As­so­ci­a­tion, said it

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