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Trends for Dairy Farming in China and Around the World

2018-12-06 10:31 Thursday

China's dairy farming industry got a late start and is still dominated by large and medium-sized farms. This model for development has been criticized, but there are significant challenges that the industry has had to manage.

dairy farming

Notably, the Chinese government has implemented strict regulations on environmental protection in recent years. Most small and medium-sized farms that fail to meet the standards have gone out of business. Large and medium-sized farms with advanced infrastructure and developed measures, can afford to meet the regulations.

Furthermore, larger farms have professional veterinary teams and disease prevention and control systems, which greatly reduces the probability of large-scale outbreaks that often decimate the herds of smaller farms.

Finally, even when seasonal losses occur during periods of intense dairy price fluctuation, strong risk hedging on the part of larger farms can help them weather difficulty.

Around the world, , the operating costs for pastures have increased over the last several years, because of low global milk prices and scarce water and land resources. The United States, the European Union, Japan and South Korea have all seen a major transition from family farms to large agribusiness holdings.

Family farms are finding it harder to afford the high operating costs. Dairy industry analysts have noted that the closure and withdrawal of small and medium-sized farms is a global phenomenon, driven by high costs, low milk prices and low profitability.

Large scale consolidation is the primary trend in most major markets. Saudi Arabia's two largest farms, AI Safi and NADEC, merged this year to form a farm with 50,000 lactating cows. Vietnam's TH Group, a new market player, has 40,000 lactating cows. At the same time, family farms in Japan and South Korea are struggling to expand on a large scale, in spite of government subsidies intended to encourage the growth of dairy farming.

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