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February 28, 2012

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China seeks more Australian cows to boost milk output

By Duncan Kennedy BBC News, Sydney

china dairy milk cowChina has been looking the increase the number of cows at its dairies to boost milk production. China wants more cows. Lots more. Especially dairy cattle.

It is all part of its plan to increase its annual national milk production to to 64 million tonnes by 2020 from the current 38 million tonnes.

Why? Well it seems the Chinese have woken up to milk's nutritional value.

Right now, the average Chinese consumer ingests about 30 litres (53 pints) of milk a year. Compare that with the average European who laps up about 225 litres a year. China even lags behind the world average, which is about 89 litres.

The message to consume more has come from the top.

Prime Minister Wen Jiabao famously urged students to drink a glass of milk a day, even though many Chinese are lactose intolerant.

Soured taste?

For many Chinese, milk has got a bad name, picked up after a tainting scandal four years ago.

Back then, unscrupulous farmers and middlemen, mostly from the Hebei province, laced milk and baby formulas with melamine, a toxic substance derived from coal.

The aim was to trick inspectors into believing the milk contained higher levels of protein.

At least six infants reportedly died and up to 300,000 became sick. Sales of milk plummeted and the reputation of the white stuff nosedived.

Now the government is trying to get consumption back on track.

It says it has taken tough action against the fraudsters. It has also taken measures against other producers for failing to meet quality standards, with reports that up to 40% of the country's dairy companies had their licences taken away last year.

Small scale

But even with those efforts to weed out the corrupt and unhygienic, it still leaves China with a substantial gap to fill.

Infected fodder led to the production of tainted milk at one of the biggest dairies in China recently

china dairy milk cow

About 75% of milk comes from dairy farmers with four cows or fewer. That makes it a cottage industry in a country that needs a mansion-sized response to the milk shortage.

And those cows which do produce cannot match the volumes of other countries.

Whilst an average Chinese cow produces about 5,000 litres per 300 days lactation cycle, its counterpart in New Zealand and Australia is gushing out 8-9,000 litres.

When it comes to cows, China has a herd of family saloons, whilst the world's best producers have a fleet of bovine Bentleys.

Imported cattle

China sees part of the solution coming from high-quality imports.

In 2010 they imported 80,000 cattle. Last year that rose to 100,000.

Nearly all those imports come from three countries: Australia, New Zealand and Uruguay.

Those countries believe there are many more export opportunities and that the Chinese will want more of their cattle and expertise.

The Chinese used to import from Europe and the United States, but haven't done so since 2006 because of fears over mad cow disease.

What it does take in from the US is bull semen. The value of that has risen from $2.7m (1.7m) in 2009 to $4.7m in 2010.

Economies of scale

It is all part of China's move to go it alone.

But even after all the high-quality livestock arrives, their problems aren't over. Those cows from Australia, New Zealand and Uruguay are, for the most part, reared on pasture land. That keeps their productivity high.

China lacks vast areas of grassland to repeat that success and is having to rely, instead, on keeping the cattle in sheds with a diet of fodder.

But the Chinese clearly believe they can eventually match milk output with their growing consumer demand by establishing a much bigger and more professional dairy industry.

They say that, in future, most produce will come from farms with not less than 100 cattle and believe economies of scale will be followed by increased quality.

Milk, the next Chinese miracle growth story? Well, dairy farmers from countries like Australia certainly hope China will become the land of milk and money.


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