China's dairy industry aims at three major goals to accelerate the pace of transformation and upgrading

On August 18, the China Dairy D20 Summit, themed “Revitalizing China's Dairy Industry through Quality and Safe Development,” was held in Beijing. Twenty large dairy enterprises jointly released the "Beijing Declaration," proposing to firmly follow the path of industrial integration, lead industrial transformation and upgrading, and vigorously promote the transition of the traditional dairy industry to a modern dairy industry.

Standardized large-scale farming takes the lead

“Fat 4.1, protein 3.5……” The monitor screen in the milking hall displayed the day's milk source quality. Two rotary milking machines turned methodically, and the cows entered the stalls one by one for automatic milking. This was the scene a reporter saw not long ago at a pasture of Junlebao Dairy.

The production mode of China's dairy industry is undergoing a major transformation. Standardized large-scale farming has already taken the lead, with milk sources from large-scale pastures accounting for more than 60%. Minister of Agriculture Han Changfu said that in 2014, the proportion of dairy farms with more than 100 cows nationwide reached 45%, and the mechanized milking rate reached 90%, up 25 and 39 percentage points respectively compared with 2008, reversing the “small, scattered, low” situation in farming.

Along with the increase in scale, production efficiency is also improving. Wang Jiaqi, a researcher at the Chinese Academy of Agricultural Sciences, said that from dairy cattle farming to fresh milk transportation and then to dairy product processing, the application of mechanized and information-based equipment has greatly improved production efficiency. In 2014, more than 70% of pastures nationwide were equipped with total mixed ration mixer wagons, 84% of pastures adopted mechanized and automated manure cleaning, and more and more pastures adopted information-based management systems.

Dairy enterprises are developing in a more globalized direction

“The development of the dairy industry faces many difficulties. The product quality of a few dairy enterprises is not high, consumers' confidence in domestic dairy products is still insufficient, and the inversion of domestic and foreign dairy product prices has led to greater impact from imports. China's dairy industry must follow a path of quality and safe development, strengthen breed improvement, quality enhancement and brand creation, and advance scale, intensification and standardization.” said Minister of Agriculture Han Changfu.

At present, the development of China's dairy industry is becoming more globalized, and its dependence on imported dairy products is rising year by year. In response, many dairy enterprises have chosen international development, establishing milk source bases or processing plants in countries such as New Zealand and Australia through new investment, acquisitions and controlling stakes.

Pan Gang, chairman of Yili Group, believes that the dairy industry “going global” includes at least three aspects: resources, standards and research and development. On the one hand, it can supplement domestic consumer demand and stabilize fluctuations in domestic raw milk prices; on the other hand, it can also ease the pressure on domestic animal husbandry in terms of resources such as water and grass.

Industrial integration is being accelerated

The advancement of integration in China's dairy industry has already shown initial results. “There are 13,000 specialized dairy farmer production cooperatives nationwide, an increase of 62% over 2008, and dairy farmers' capacity for self-service and dialogue with enterprises has clearly improved. At the same time, contract milk purchasing is being vigorously promoted. Most dairy farmers have signed milk purchasing contracts with dairy enterprises, and cooperative relations are tending toward long-term stability.” said Gu Jicheng, secretary-general of the China Dairy Association.

The dairy industry covers multiple sectors including forage planting, dairy cattle farming and dairy processing, and integration is the ideal pattern for dairy industry development. “In the future, it is necessary to accelerate the building of a modern dairy production system and construct an integrated development model of planting, farming and processing.” said Han Changfu.

How can industrial integration be promoted in depth in the future? Li Shengli, chief scientist of the National Dairy Cattle Industry Technology System, suggested that in the farming segment, the dairy production and operation system should be innovated. Dairy farmers are the main body of dairy cattle farming, and it is necessary to actively support business entities such as large dairy farmer households, joint-household operations and family pastures, implement the combination of agriculture and animal husbandry, moderate scale and balanced planting and farming, vigorously support the development of dairy farmer cooperatives, raise the degree of organization among dairy farmers, and complete the transformation and upgrading of farming communities into pastures.