Chinese dairy industry earns recognition for the industry with outstanding quality
This is an industry that draws enormous public attention and involves countless consumers.
This is an industry that has gone from rapid development to rock bottom and then risen from the ashes. Taking 2008 as the turning point, China's dairy industry has made an all-out effort to actively transform into a modern dairy industry. "Build good barns, feed good grass, raise good cows, produce good milk, and restore the dignity of China's dairy industry" has become the shared determination of everyone in China's dairy sector.
Now, after 8 years of effort, standardized large-scale farming has become the mainstream, dairy enterprises are accelerating the construction of stable and controllable milk source bases, and the main quality indicators of raw milk can rival those of developed countries... China's dairy industry is presenting itself to the world with a brand-new look.
Quality and safety at their best period
In August this year, two things greatly encouraged people in the dairy industry.
First, the newly released "China Dairy Quality Report" cleared the name of China's dairy industry: the pass rate of random inspections for prohibited additives in raw milk in China has remained at 100% for 7 consecutive years. In 2015, the average values of milk protein rate and milk fat rate, which mark dairy quality, reached 3.14% and 3.69% respectively, higher than China's "Raw Milk" national standard by 0.34 and 0.59 percentage points respectively. The total bacterial count dropped to 467,000 CFU/mL, far below the national standard of 2 million CFU/mL, and the somatic cell count dropped to 333,000 cells/mL, with the main quality and hygiene indicators reaching the level of developed countries.
Han Changfu, Minister of Agriculture, said: "After 8 years of effort, China's dairy industry has learned from its painful experience, fought back from the brink, risen from the ashes, and achieved leapfrog development. At present, the quality and safety level is at its best in history."
Second, not long ago, Junlebao infant formula milk powder announced that it would enter the Hong Kong, China market with "same product, same quality, same price." Test results from SGS, an internationally authoritative testing organization, on Junlebao milk powder showed that in terms of nutritional composition, food safety and other aspects, it fully complies with relevant standards of Hong Kong, China.
From going to Hong Kong, China to buy milk powder, to going to Hong Kong, China to sell milk powder, such a change is exciting.
Behind the change is the nation's rock-solid determination to revitalize the dairy industry.
In October 2008, the State Council promulgated the "Regulations on the Supervision and Administration of Dairy Quality and Safety," the first regulation for China's dairy industry.
Driven from the top level, industry rectification followed. The "Outline of the Plan for the Rectification and Revitalization of the Dairy Industry" set out a 3-year dairy industry revitalization plan, and the "Measures for the Administration of Raw Milk Production and Purchase" regulated raw milk production, purchase, transportation, and supervision and testing.
After that, regulatory documents for China's dairy industry appeared in the public eye with extremely high frequency, covering raw milk, the production, random inspection, transportation, mergers and restructuring of infant formula milk powder, and many other aspects. The successive introduction of a series of policies and systems built a long-term mechanism for the sustainable and healthy development of the dairy industry. At the same time, a series of substantial fiscal subsidies also entered the dairy sector one after another.
Policies and funding began to gradually show their driving force for China's dairy industry. In 2015, the proportion of large-scale dairy cow farming nationwide approached 50%, increasing by about 4 percentage points per year on average; whole-plant silage feed spread rapidly, and high-quality alfalfa output reached 1.8 million tons; more than 70% of dairy farms adopted total mixed rations, and mechanized milking and cold-chain storage and transportation were fully realized. Dairy production efficiency improved substantially, with the average milk yield per Holstein cow reaching 6 tons, 1.2 tons higher than in 2008, greatly narrowing the gap with developed dairy countries.
The "small, scattered, low, poor" situation has changed
To revitalize the dairy industry, it must be achieved through transformation and upgrading.
Li Shengli, chief scientist of the National Dairy Cattle Industry Technology System and professor at China Agricultural University, said: "In 2015, the proportion of standardized large-scale farming of dairy cows with more than 100 head in China reached 48.3%, 28.8 percentage points higher than in 2008; the national mechanized milking rate reached 95%; milk sources from large-scale farms accounted for more than 60%. This farming pattern is very conducive to ensuring milk source quality and to industrial transformation and upgrading."
The pain of the past brought rapid advancement of dairy industry integration. In 2015, the proportion of milk source bases built by and invested in by dairy enterprises nationwide exceeded 20%, nearly tripling compared with 2008.
Gu Jicheng, vice president and secretary-general of the Dairy Association of China, said that only through integration can a multi-party, close interest linkage mechanism truly be established, thereby achieving greater controllability in both quantity and quality. This can fundamentally resolve the traditional dairy industry's "small, scattered, low, poor" situation, and is also the direction and goal of China's dairy industry transformation and upgrading.
"Junlebao is located in Hebei. After witnessing the collapse of a dairy giant, no one can appreciate the value of quality more than we can," said Wei Lihua, president of Shijiazhuang Junlebao Dairy Co., Ltd. He said that in recent years Junlebao has increased efforts to build milk source bases, and all infant formula milk powder is produced using its own milk sources.
China is in a critical period of dairy industry transformation and upgrading. Small and medium-sized farms and households will exist for a long time. These farms and households have relatively weak management and a low degree of organization. How can they be driven to develop together?
Zhongding Animal Husbandry is carrying out such exploration: "We adopt the 'company + base + farmers' model of 'stock integration and full-process trusteeship,' using large enterprises to drive the integration of small and medium-sized farms, cooperating with dairy farmers, and controlling the quality of small and medium-sized farms," said company president Sun Guoqiang. Through entrustment, contracting, technical output and other methods, Zhongding Animal Husbandry currently manages more than 140 farms under trusteeship, spread across 15 provinces and cities nationwide, involving 100,000 dairy cows and driving more than 3,000 farming households.
According to reports, China currently has 15,100 specialized dairy farmer production cooperatives, 6.2 times more than in 2008. According to supervision and inspection by relevant departments, most dairy farmers have signed milk purchase contracts with dairy enterprises, and cooperative relations are tending toward long-term stability.
Top 20 dairy enterprises break through in international competition
"A glass of milk can strengthen a nation." At present, China's per capita dairy consumption is only 1/3 of the world average and 1/2 of that of developing countries. In the future, as income increases, population grows, and the level of urbanization rises, especially after the full opening of the second-child policy, demand for dairy consumption will continue to increase.
Huge market potential means the national dairy industry has great prospects. In recent years, China's national dairy industry has been breaking through in competition with international brands. Yili and Mengniu have entered the world's top 20 dairy enterprises. Modern Farming's pure milk and Feihe Dairy's infant formula milk powder have won gold awards at the World Food Quality Assessment Conference many times.
Dairy enterprises such as Yili, Mengniu, Bright Dairy, Beingmate and New Hope have established milk source bases or processing plants in New Zealand, Australia, France, Israel and other countries through new investment, acquisition and controlling stakes, and the international capabilities and global resource integration capabilities of dairy enterprises have improved markedly.
Han Changfu said that to achieve the revitalization of the national dairy industry, it is necessary to be guided by market demand, take high quality and safety as the core, aim at improving the competitiveness of the dairy industry, actively promote supply-side structural reform of the dairy industry, and accelerate the transformation of the dairy industry development model. "We are confident that in 5-10 years, we will strive to bring dairy quality to the international advanced level by 2020, and to enter the ranks of the world's dairy powers as a whole by 2025, holding the 'milk bottle' firmly in our own hands."