Dairy Industry In China

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The past three decades have seen both dairy production and dairy consumption in China soar, averaging a 12.8 percent annual growth rate since 2000. China’s cheese market has nearly quadrupled in value since 2008, rising from RMB 668 million ($107 million) to RMB 2.7 billion ($433 million) this year, according to consultancy Euromonitor, which forecasts that it will double to RMB 5.3 billion by 2018. Dubbed the “white gold rush,” the overall dairy industry in China was worth $40.6 billion last year, compared with only $20.7 billion in 2008.
To understand the cause of this rapid growth in recent years, we must take a look at the history of the Chinese dairy industry.
Contrary to popular belief, dairy products have a long history in China, especially in the cities that were open to foreigners in the late 1800’s. Dairy products are seen as nutritious, healthy foods, but their consumption had been hampered until recently by high prices, absence of refrigerated transportation, and lack of household refrigeration.
Since the economic reforms of 1978, investments in technology have increased the feasibility of supplying dairy products. First, introduction of modern processing technologies, such as ultra-high temperature pasteurization, had greatly expanded the shelf life. This enabled transportation of the products from the farms and production facilities to the population. Second, the import of dairy cattle and advanced feeding and management practices from the West dramatically increased the productivity of the dairy operations. From 1996 to 2002, China doubled its milk production, surpassing Australia and Japan as the third largest milk producer in Asia. Lastly, the average Chinese income increased 400% over two decades. In 2002, 87% o...

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...overnment wants to strengthen the Chinese dairy industry's reputation and fend off competition from foreign companies who have been grabbing market share since 2008.
The domestic dairy producers are now looking for ways to produce locally to meet the current as well as future dairy consumption demand which is expected to increase 38 percent by 2022. Domestic dairy producers like China Mengniu Dairy, Yili and Bright Dairy are spending billions of dollars to build and invest in mid-to-large-scale farms. As a Mengniu spokesman said, "By next year, 100 per cent of our raw milk used in our products will come from the farms we built or work with."
However, they lack the technology to produce efficiently. Chinese farm conditions are very similar to Israeli ones – not enough water and too much heat. Yet Israeli cows produce three to four times more milk than Chinese cows

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