News milk
Chinese farmers dump milk and slaughter cows
The lagging demand from Chinese consumers is hitting dairy farmers (and pig farmers) in China just as hard or even harder than the exporting countries that like to sell more to China. This is evident from reports in local newspapers and other media.
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The strict lockdown that was first imposed to prevent the spread of corona and the disease outbreaks after the relaxation of the measures have hit the Chinese economy hard. Production and exports of consumer products have fallen sharply and citizens' incomes have also taken a hit.
Consumers want cheap dairy
The demand for dairy and other foodstuffs from the middle and higher price segments has decreased considerably, for example the Global Times reports. Most of the people buy cheap dairy products. The Chinese dairy companies want to continue selling and have therefore had to sharply reduce their prices. This in turn has meant that they have paid the dairy farmers less and sometimes no longer collect the milk. In response, farmers have turned to dumping milk and slaughtering dairy cows.
According to the official Chinese media, this is rare, but everyone knows the stories about it. There is less restraint about the problem on social media in China.
High feed costs due to imports
The production costs of milk (and also meat) are high. This is because only a limited area of roughage crops can be grown and therefore a lot of feed has to be imported from the US, Canada and Argentina, among others. In August 2021, when everything was still going well, the milk price was almost 60 cents per kilo, a record price. The price has now dropped to just under 53 cents, while feed costs have skyrocketed due to high inflation.
Take care of livestock
To prevent even more cows from being slaughtered and leaving a far too small dairy herd next year, regional authorities have created subsidies to help dairy farmers get through the difficult times. Dairy processors are also put under pressure not to pay a milk price that is too low and to collect all the milk. It is stated that they will have to recover the additional costs they incur from the dairy farmers later when things improve.
The economy must get going again
It is difficult to verify whether everything is going as the authorities say it should, but the fact is that Chinese dairy farming is currently going through a deep dip. They can only recover from this when the economy picks up again and consumers have more money available again. Exporters of all kinds of foodstuffs to China are also waiting for that moment. Judging from the reports from China, it may take some time before things really improve.