ReportsnReports: Research Report on Supply & Demand of Dairy and Products in China 2011/2012

22-Mar-2012 | News-Press Release

This report depicts the complete picture of the status of China’s dairy industry in 2011, including production of raw milk and processed products, dairy consumption, dairy trade, trend of the price for raw milk and processed products, operation of the dairy industry, dairy market competition situation, revenues of the key processing companies and investment situation. The report also covers the situation of production, consumption and trade of the main dairy producing and trading countries, the impact from the world dairy market to China’s dairy industry. The report also has a forecast on the trend of China’s dairy industrial development in 2012.

2011 was an important turning point for the development of China’s dairy industry, there was acceleration of the transition from coarse quantity growth to intensive quality efficiency, and there was transition from super conventional unregulated development towards stable orderly growth. There were both opportunities and challenges for China’s dairy industry.

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From the perspective of challenges, CPI kept on moving up and there was overall surge of commodity price in 2011. The price for feed and fodder, price for fuel and labor rose, these raised the production cost of raw milk constantly. More and more smallholder farmers were forced to give up dairy farming thanks to the faster growth of both cost and expenditure than price for milk. During the same period of time, the input-output efficiency of scaled farming was much better than that of the smallholders, whereas the proportion of scaled farming in raw milk production climbed rapidly. China is one of the countries that had the global highest raw milk price. The too high raw milk price did not only weaken the competitiveness of China’s dairy industry in the world, but also made it difficult to export dairy exports and imposed a huge cost pressure on domestic dairy processing companies. Processing companies were forced to adjust their product structure and to raise the proportion of high value added products so as to maintain and improve the gross profit margin. The too high dairy price restrained consumption, the per capita dairy consumption of residents lingered at the same level. In 2011 the domestic price for raw milk and milk-based raw materials sustained at a high level, whereas the international products were more competitive than the domestic made both in quality and price. Meanwhile the negative impacts from the dairy quality and safety incidents did not vanish completely, there was a continual growth of dairy import to China, especially both full-cream and skim milk powder which saw a record level of import. Raw material milk powder import is estimated to be close to 500,000 tons in 2011, up 20% from 2010. The huge import brought a primary impact on China’s milk powder sector and even the whole dairy farming sector which face a severe market environment.

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