Milk prices continue to decline and the dairy industry is in labor pains

The dairy industry is in labor pains

With the impact of imported low-cost dairy products and the slowdown in consumption growth, it is difficult to sell milk.

"the price of raw milk has been falling, reaching 4 yuan per kilogram two years ago, but now it is about to fall below 3 yuan. If it goes on like this, we will lose money soon. " Recently, Lu Xianglai, a dairy farmer in Xingtang County, Hebei Province, is very worried. It is hard to resist the continuous decline in milk prices. Qiu Shengming, a big farmer in Jinan, Shandong Province, who has 1800 cows, is ready to sell some cows at a low price. The situation between Lu Xianglai and Qiu Shengming is not the worst. As milk prices continue to decline, some places begin to feed pigs with fresh milk.

Yu Kangzhen, vice minister of agriculture, said that at present, the loss area of China's dairy industry has exceeded 50%. According to the designated monitoring of the Ministry of Agriculture, the loss area of dairy farming reached 51% in March, an increase of 5.8% over the same period last year. At the same time, the stock of dairy cows decreased by 11.9% compared with the same period last year. To make matters worse, the situation continues and spreads. So that the dairy industry has been listed as a "high-risk industry" by some banks.

Analyzing the reasons for the dairy industry's losses, Yu Kangzhen said that in the past two years, with the impact of imported low-cost dairy products and the slowdown in dairy consumption growth, the dairy industry is facing challenges, product sales are not smooth, and the loss area continues to expand.

On the one hand, international milk prices are seriously upside down with domestic milk prices. According to the data released by the International Dairy Economics Association, in May this year, the global average price of raw milk was 1.44 yuan per kilogram, while the average price of raw milk in 10 major producing areas in China was 3.46 yuan per kilogram. On May 3, the auction price of whole milk powder at the Fonterra Global Dairy Fair in New Zealand showed $2176 per tonne, down 58.2 per cent from the peak price of $5208 per tonne in 2013. Recently, the CIF price of imported milk powder is 18000 yuan per ton, while the domestic price is close to 30, 000 yuan per ton.

On the other hand, the growth rate of dairy consumption has slowed down. Take liquid milk as an example. According to the National Bureau of Statistics, sales of liquid milk in China totaled 27.389 million tons in 2015, an increase of 3.6 percent over the previous year. However, compared with the average annual growth rate of 5.1% during the 12th five-year Plan period and 11.1% during the Eleventh five-year Plan period, the growth rate is obviously on the low side. At the same time, domestic milk consumer confidence is still in the repair stage.

When a cow fly bites a cow, the cow will have labor pains. Gao Hongbin, president of the China Dairy Association, said that at present, the pains of the dairy industry are highlighted as "triple difficulties."

One of the difficulties is the low price of milk. At present, the purchase price of fresh milk in large farms has dropped by 10% compared with the same period last year, while in small-scale farming communities and farms, the purchase price of fresh milk has dropped by 15% compared with the same period last year.

Another difficulty is the difficulty of selling milk. Under the downward pressure of consumption growth, dairy enterprises began to limit the intake of raw milk, accounting for about 10% of the total raw milk production. Some large aquaculture enterprises also have to spray raw milk that has not been processed into fresh milk into milk powder because of sales difficulties, which accounts for about 5% of the total output of fresh milk.

Another difficulty is the loss. At present, the loss of dairy enterprises has not been encountered for many years.

Yu Kangzhen said that at present, the difficulties faced by the dairy industry are related to the macro-economic environment and periodic fluctuations in international dairy prices, but it is mainly because our own competitiveness is not strong enough, and the costs of factors such as feed and labor are rising rapidly. the improvement of technology and management to save costs and increase efficiency is slow, the degree of integration of dairy farming and dairy processing is still not high, and the interest linkage mechanism is not close. Consumer confidence in domestic dairy products is still not strong.