At present, the upstream and downstream industries of Chinas dairy industry are showing a pattern of rising prices and volumes. Recently, the 11th China Dairy Industry Conference was held in Shijiazhuang, Hebei Province. The 2020 China Dairy Industry Quality Report (hereinafter referred to as the "Report") released at the meeting showed that in 2019, the development situation of the national dairy industry was steadily improving, with dual growth in production and consumption of the dairy industry. The quality of dairy products continued to maintain a high level, and the proportion of large-scale aquaculture further increased. The revitalization of the dairy industry took a solid step forward. At the same time, consumer confidence has greatly recovered, and the market share of domestic brands of infant formula milk powder has surpassed that of imported brands for the first time. Chinas dairy industry is entering a new growth cycle。
The industrys "quantity" and "quality" have risen simultaneously
At this conference, Yu Kangzhen, Deputy Minister of Agriculture and Rural Affairs, stated that since the 13th Five Year Plan period, China has continuously increased policy support, quality and safety supervision, leading cultivation, and brand promotion efforts. Milk production has steadily increased, industrial quality has significantly improved, and consumer confidence in domestic dairy products has significantly increased。
Yu Kangzhen introduced that in the past five years, the comprehensive production capacity of the dairy industry has been comprehensively improved. The Ministry of Agriculture and Rural Affairs has expanded the scope of grain to feed conversion, increased the construction of high-quality alfalfa bases, continued to implement the genetic improvement plan for dairy cows, and cultivated and developed modern family ranches. The proportion of large-scale dairy cow farming has exceeded 64%. According to the data released by the Report, in 2019, the national raw milk production was 32.976 million tons, a year-on-year increase of 3.8%, and the dairy product production was 27.194 million tons, a year-on-year increase of 5.6%, both achieving the largest growth rate since 2015. In the first half of 2020, the domestic raw milk production was 14.31 million tons, a year-on-year increase of 7.9%, further increasing the growth rate。
For dairy companies, in addition to improving quantity, quality assurance is more important. Ma Chunliang, Director of the Food Production Safety Supervision and Administration Department of the State Administration for Market Regulation, stated that the market supervision department has established a regulatory system for the entire dairy product chain, covering the entire process from raw material control, process control, factory inspection, product sales, and traceability system, from ranches to milk bottles。
According to the report, in 2019, the qualified rate of fresh milk sampling was 99.9%, continuing to maintain a high level; The average sampling values of milk protein and milk fat were 3.25% and 3.82%, respectively, reaching the level of developed countries; The total number of colonies and the average value of somatic cell sampling are superior to the EU standards. 4576 fresh milk procurement stations and 5309 transportation vehicles nationwide have achieved full supervision coverage, ensuring the quality and safety of fresh milk。
The banned additives in fresh milk nationwide have been zero detected for 11 consecutive years. In 2019, the qualified rate of infant formula milk powder sampling reached 99.8%, ranking first in the domestic food industry. The indicators of milk protein and milk fat in large-scale farms have reached or exceeded the level of developed countries, "Ma Chunliang said。
At the same time, the improvement of industrial quality is accelerating, and the process of large-scale breeding is rapidly advancing. The report points out that in 2019, the proportion of large-scale aquaculture with over 100 livestock on hand nationwide reached 64.0%, an increase of 2.6 percentage points year-on-year. The yield of dairy cows was 7.8 tons, an increase of 0.4 tons year-on-year; 100% mechanized milking will be achieved in large-scale farms, and 95% will be equipped with fully mixed ration (TMR) mixer trucks。
The industrys revenue has also significantly improved. According to Gao Yanmin, Director of the Consumer Products Industry Department of the Ministry of Industry and Information Technology, under the impact of the epidemic, Chinas dairy industry has still achieved good development results. In the first eight months, the entire industry achieved operating revenue of over 270 billion yuan, a year-on-year increase of 5.7%, and is one of the few industries that achieved growth。
At present, 31 provinces across the country have issued opinions or work plans on the revitalization of the dairy industry in the name of provincial governments, and Hebei, Inner Mongolia, and Heilongjiang provinces and regions have formulated implementation plans for the development of millions of tons of milk projects. According to Zhang Zhishan, Deputy Secretary General of the China Dairy Association, "This year, the policy environment for the revitalization of Chinas dairy industry is stabilizing and improving, and milk production will continue to grow, with an increase expected to exceed 2 million tons
Improving the competitiveness of the dairy industry is urgent
Chinas dairy industry is in its best era in decades. In the global dairy industrys top 20 rankings, Yili and Mengniu reached new heights and ranked fifth and eighth. Among the top 10 global dairy farming companies, four Chinese companies, including Modern Animal Husbandry and Shengmu, were shortlisted. Both processing and breeding, Chinas dairy industry has entered the worlds first camp. But it should also be noted that China still has a long way to go before becoming a "dairy powerhouse". Improving the competitiveness of the dairy industry is a prominent issue to be addressed in the development of Chinas dairy industry。
According to the "Opinions on Promoting the Revitalization of the Dairy Industry and Ensuring the Quality and Safety of Dairy Products" issued by the General Office of the State Council in 2018, by 2020, the self-sufficiency rate of domestic milk sources will remain above 70%. However, from a data perspective, in 2019, China imported 3.132 million tons of dairy products, a year-on-year increase of 11.22%, equivalent to 17.544 million tons of fresh milk, of which large packets of powder and liquid milk accounted for 34.1% and 31.1%. If calculated based on this data, the self-sufficiency rate of domestic milk sources in 2019 was 65.3%。
Chinas self-sufficiency rate of milk sources has fallen below the safety bottom line of 70%. In response, Zhang Zhishan, Deputy Secretary General of the China Dairy Industry Association, believes that China should pay more attention to development quality and value, and strive to move towards the middle and upper reaches of the global value chain。
Zhang Zhishan believes that promoting the revitalization of Chinas dairy industry still faces many challenges. Firstly, in the upstream of the industrial chain, Chinas dairy industry is highly dependent on internationalization. On the one hand, China imports a large amount of large bags of flour from countries such as New Zealand every year; On the other hand, it is necessary to import forage to meet the needs of domestic dairy farming. Especially alfalfa, which has the highest nutritional value among grasses, is the key to improving the quality of fresh milk. At present, Chinas high-quality coarse feed alfalfa mainly relies on imports, with the United States alone accounting for 75% of the total imports. In addition, China also imports a large number of cows from Oceania and South America every year to meet the expanding demand for breeding。
Raising cows without making money leads to stagnant raw milk production
According to reports, the number of small and medium-sized livestock farming households in China has dropped from 22000 in 2014 to 6000 in 2019 as the raw milk industry entered a downward cycle since 2015; The number of dairy farms with a scale of over 100 cows decreased from 8600 in 2016 to 5124 in 2018, and rebounded to 6725 in 2019, but it remains the weakest link in the industry chain。
"A slight change in the international trade environment will have an important impact on Chinas dairy industry." Zhang Zhishan believes that in recent years, trade frictions between China and the United States, Australia and other countries have been heating up. This year, the COVID-19 has superimposed, which has a great impact on the safety of Chinas dairy industry. Stopping the production of forage and cattle exports, as well as increasing tariffs, will further increase breeding costs, which will hit the domestic livestock industry and the entire dairy industry chain。
On the other hand, in terms of products and consumption, although the total consumption of dairy products in China is continuously increasing, there is still a huge gap between the per capita consumption and the world average. Zhang Zhishan stated that compared to countries and regions such as Europe and America, the types of dairy products in Chinas market are relatively single, mainly concentrated in traditional liquid milk and milk powder, and the market size of categories such as cheese and butter is still very small. The cultivation of milk awareness and popularization of milk knowledge among Chinese consumers, especially rural consumers, is still very insufficient, and the trust of Chinese people in domestic dairy brands has not returned to the level before 2008。
Continue to strengthen and optimize
At present, the per capita share of dairy products in China is only one-third of the world average. With the upgrading of urban and rural residents consumption, the demand for high-quality and safe dairy products will increase, and the future dairy industry development market will be broad.
In response, Yu Kangzhen stated that during the 14th Five Year Plan period, the development of the dairy industry should be regarded as the vanguard of agricultural modernization, focusing on reducing costs, optimizing structure, improving quality, creating brands, and increasing vitality. Efforts should be made to solve problems such as mismatched supply and demand structures, weak interest linkage mechanisms, and weak international competitiveness, ensuring the achievement of basic modernization and comprehensive revitalization of the dairy industry by 2025, and building a modern dairy power。
Therefore, China will start from the source and build a modern dairy production system. Organize the implementation of the second round of genetic improvement plan for dairy cows, increase support for grain to feed and high-quality alfalfa base construction, support the construction of 1500 modern family ranches every year, cultivate and strengthen a group of dairy farmers cooperatives, and improve the level of standardized and precise management of dairy cows; Build a dairy quality and safety supervision network that covers the entire chain of production, transportation, processing, and circulation, and implement precise and full time management for all milk stations and transportation vehicles nationwide; Guide dairy enterprises to strictly fulfill acquisition contracts, promote stable purchase and sales methods such as order production and long-term contracts, improve the long-term stable interest linkage mechanism between dairy enterprises and farmers, encourage dairy enterprises to strengthen the construction and management of milk source bases through self construction, acquisition, equity participation, custody, and other methods, and promote the integrated development of breeding and processing; Implement the dairy industry brand enhancement action, with a focus on infant formula milk powder, and focus on cultivating a group of national dairy industry "golden signboards" with international influence。
To revitalize the national dairy industry, it is necessary to cultivate leading enterprises and create brands, so that the brand of Chinas dairy industry can go global. Yu Kangzhen proposed to focus on the top 20 enterprises, support the upgrading of dairy farming, dairy processing, and product innovation research and development, build a group of international dairy enterprise groups, and lead and drive the national dairy industry to become bigger and stronger。
Source: "China Food News Network"
