A cow numbers disaster for China’s dairy industry

Hoard's Dairyman: 

A cow numbers disaster for China’s dairy industry

Date: 
Fri, 12/20/2013

The country’s milk cow population has dropped 20 percent this year.

by Dennis Halladay, Hoard’s Dairyman Western Editor

China, with the world’s biggest population, is gradually developing a taste for dairy products, particularly because parents want to feed their babies high-protein formula.

The surge in demand that goes with it has far exceeded the ability of Chinese dairies to keep up, on the order of about 21 billion pounds per year on a fluid milk basis. The gap is expected to widen as older children and adults increase their consumption of dairy products, and it is what makes China the biggest sales opportunity for exporters around the world.

That opportunity grew even larger in 2013 due to a massive decline in dairy cow numbers on Chinese farms.

According to media reports from around the world, China’s dairy cow population collapsed from 8 to 10 million head in 2012 to just 6 to 8 million head this year. That 2 million head loss is more cows than are in all of California, and it means another 16 billion pounds or so of milk won’t be made in China.

The massive culling is believed to be due to the same market forces that U.S. producers have dealt with in recent years: drought, expensive feed and an extremely steep increase in beef prices.

Reports say that in 2012, beef prices in China were the equivalent of $3.72 per pound. Since early this year they have been over $13, which has prompted many small, cash-strapped farmers to cull everything they have.

Needless to say, the 20 percent decline in the size of China’s dairy herd will take a very long time to recover from, even if farmers make it a high priority. And even if they do, the gap between China’s demand for milk and its own supply will only continue to grow in the meantime.

Dennis blog footer

The author has served large Western dairy readers for the past 36 years and manages Hoard’s WEST, a publication written specifically for Western herds. He is a graduate of Cal Poly-San Luis Obispo, majored in journalism and is known as a Western dairying specialist.

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