Earth Science News
FARM NEWS
Economic woes sour prospects for China's dairy farmers
Economic woes sour prospects for China's dairy farmers
By Matthew WALSH
Beijing (AFP) Nov 10, 2024

Farmer Liu Bingyong used to make a tidy profit selling milk but is now leaking cash -- the victim of a dairy sector crisis that embodies several of China's economic woes.

Milk is not a traditional mainstay of Chinese diets, but the government has long pushed people to drink more, citing its health benefits.

The country has expanded dairy production capacity and imported vast numbers of cattle in recent years as Beijing pursues food self-sufficiency.

But chronically low consumption has left the market sloshing with unwanted milk -- driving down prices and pushing farmers to the brink -- while a baby bust threatens to cloud its future prospects.

"The current state of China's dairy industry has been long in the making," said Liu, a veteran farmer in the eastern province of Shandong.

"We always knew things were going to get worse if the industry didn't adjust," he told AFP.

A few years ago, Liu typically skimmed a profit of about 5,000 yuan ($700) per day from his yield.

But since last year, purchase prices have plummeted so low that he has been making losses.

His business has been shedding up to 10,000 yuan a day during the worst times, and even now is "still not profitable", he said.

"There's no way out of it. It's become normal for farmers to slaughter their cows."

- 'Too many cows' -

Liu is not alone in feeling the pinch, with farmers across China's northern dairy belt telling AFP they had been in the red for months.

They said many had been dumping milk, converting it into powder, selling or even culling animals to balance the books.

"There are just too many cows," said a farmer surnamed Wu in the northeastern province of Liaoning.

Yifan Li, the head of Asia dairy at StoneX, a commodity financial services firm, traced the issue to the mass import of calves from 2019.

Those animals reached maturity by 2022, when mass Covid lockdowns in Chinese cities strangled normal supply lines.

The curbs were lifted at the end of that year, but persistently listless consumption has left the dairy industry oversupplied, Li said.

"Chinese consumption is coming back, but consumers prefer to spend on experiences... (and not) on premium products anymore," he told AFP.

Official figures show China's milk production rose 6.3 percent last year from 2022.

But purchase prices for raw milk have been generally declining and last year fell below the average production cost of 3.8 yuan per kilogram.

Wu, the farmer in Liaoning, said farmers in his community had been selling surplus cattle for beef.

But that sector, too, is oversupplied. "We're selling them off, but everything just gets cheaper and cheaper," he told AFP.

- Forgotten luxury -

Up to 300,000 animals may have to be culled to ease overcapacity, a top dairy industry association official said in July, according to domestic media reports.

The agriculture ministry has urged more support for the sector, though farmers interviewed by AFP said they had received little help so far.

It is a setback for an industry symbolic of China's decades-long economic rise, bringing once-scarce dairy products into the lives of increasingly affluent, cosmopolitan and health-conscious people.

The sector grew rapidly through the 1990s but a major food safety crisis in 2008 -- when tainted milk powder sickened 300,000 children and was linked to the deaths of six babies -- crashed consumer confidence and prompted an industry consolidation.

The average Chinese person still only consumes around a third of the national recommended amount of dairy per year, official figures show.

And beyond the economic slowdown, the country's chronically low birth rate adds uncertainty to the industry's prospects.

"The birth rate definitely has some influence (on demand), but not a huge direct impact," said Li of StoneX.

But, he said, the sector's recovery would turn on convincing consumers to return to products seen as more of a luxury compared with their status as a kitchen staple in the West.

"It's like some consumers have forgotten about it. It doesn't (feature) on their priority list," Li told AFP.

Related Links
Farming Today - Suppliers and Technology

Subscribe Free To Our Daily Newsletters
Tweet

RELATED CONTENT
The following news reports may link to other Space Media Network websites.
FARM NEWS
Scientists harvest nutrient-rich rice grown in space
Sydney, Australia (SPX) Nov 11, 2024
At a crop breeding center in Shanghai, researchers have successfully harvested rice that was cultivated from seeds initially grown on China's space station Tiangong, also known as "Heavenly Palace." The rice plants have completed a full growth cycle on Earth, maturing after more than 100 days since planting. This space-to-ground experiment began with six rice seeds sent into orbit in 2022 on the Wentian spacecraft. Taikonauts onboard Tiangong bred these seeds into 59, which they returned to Earth. ... read more

FARM NEWS
Climate crisis worsening already 'hellish' refugee situation: UN

Spain PM accused of 'blackmail' by tying budget to flood aid; Royals return to flood zone

COP29: Climate disaster fund for poor countries 'ready'

Fukushima nuclear debris arrives at lab after secret journey

FARM NEWS
New AI microbiome tool offers breakthroughs in forensics and epidemiology

NASA to transform in-space manufacturing with laser beam welding collaboration

Startup turns mining waste into critical metals for the U.S.

A smart screen for cooling and sun protection

FARM NEWS
Drinking water outage hits half of France's Mayotte

Will living by the sea remain viable?

US hopes river pact with Mexico will reduce water scarcity

Curtin and NASA unlock ocean secrets from space

FARM NEWS
Measurements from Lost Seaglider reveal impact of warm ocean water on Antarctic ice

Deep ocean study offers new insights into ancient ice age shift

Was Snowball Earth truly a global event? new study provides strongest evidence yet

First Antarctic amber discovery opens new window to ancient climate

FARM NEWS
Economic woes sour prospects for China's dairy farmers

White truffles, Italy's gold, menaced by climate change

More than 33 million Nigerians face hunger next year: report

Scientists harvest nutrient-rich rice grown in space

FARM NEWS
Schools shut as flood-hit Spain braces for more torrential rain

Fifth storm in under a month bears down on Philippines

Airlines around Asia ground Bali flights after volcano erupts

Evacuations, call for aid as Typhoon Usagi approaches Philippines

FARM NEWS
What Trump's re-election could mean for Africa

Senegal grapples with floods, economy ahead of parliamentary elections

Mali detains CEO of gold mining firm Resolute

Burkina army launches probe after mutilation video leak

FARM NEWS
Location of ancient ochre mine found in Eswatini

Chimpanzees show improved performance on difficult computer tasks with an audience

New findings on Denisovans reveal their role in shaping early human genetics

Human culture's distinctiveness lies in its open-ended nature

Subscribe Free To Our Daily Newsletters




The content herein, unless otherwise known to be public domain, are Copyright 1995-2024 - Space Media Network. All websites are published in Australia and are solely subject to Australian law and governed by Fair Use principals for news reporting and research purposes. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA news reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. All articles labeled "by Staff Writers" include reports supplied to Space Media Network by industry news wires, PR agencies, corporate press officers and the like. Such articles are individually curated and edited by Space Media Network staff on the basis of the report's information value to our industry and professional readership. Advertising does not imply endorsement, agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. General Data Protection Regulation (GDPR) Statement Our advertisers use various cookies and the like to deliver the best ad banner available at one time. All network advertising suppliers have GDPR policies (Legitimate Interest) that conform with EU regulations for data collection. By using our websites you consent to cookie based advertising. If you do not agree with this then you must stop using the websites from May 25, 2018. Privacy Statement. Additional information can be found here at About Us.