Characteristics of China's dairy economic development in 2016
In 2016, against the background of the continued downturn in the international market and the overall lack of competitiveness of the domestic dairy industry, dairy imports continued to grow, and the domestic dairy farming industry remained difficult. With the withdrawal of a large number of retail and small-scale farmers, some large-scale farmers are expanding their scale and accumulating production capacity, and the main body of dairy farming is undergoing structural changes. In the second half of the year, with the adjustment of the international market, the purchase price of fresh milk bottomed out and the market showed signs of recovery.
Raw milk prices bottomed out and rebounded
In the first 11 months of 2016, the price of raw milk was generally stable and experienced a "high-low-high" curve. According to the monitoring data of the price of raw milk by the Ministry of Agriculture, the price of raw milk per kg in early January 2016 was 3.57 yuan, which was a decrease of 2.72% compared with the highest price of 3.67 yuan per kg in early 2015. As of August, the price of raw milk has continued to fall, with a minimum of 3.39 yuan per kilogram, down 5.04% from the beginning of the year. Starting from the end of August, the price of raw milk began to rebound. As of December 28, it rose to 3.53 yuan per kilogram, 4.13% higher than the lowest point in the year, but still lower than the highest price at the beginning of the year. According to the national dairy industry technical system's monitoring data on raw milk prices of nearly 300 large-scale farms across the country, the trend of raw milk prices is consistent with the monitoring results of the Ministry of Agriculture, but the results are not the same. The average price of raw milk in January was 3.82 yuan per kilogram, down 4.74% year-on-year; from January to July, the average price of fresh milk went all the way down to 3.64 yuan per kilogram, down 4.71%; since August, raw milk The average price began to pick up. The average price of raw milk in December rose to 3.78 yuan per kilogram, 1.05% lower than the highest price at the beginning of the year.
Dairy imports increased significantly
In the context of the continued decline in international dairy product prices and the overall lack of competitiveness of the domestic dairy industry, the import of various types of dairy products has grown rapidly. According to national customs statistics, the import volume of various dairy products rose in 2016, and the import volume reached a record high. According to the growth rate from January to November, the total import of dairy products will exceed 2 million tons for the first time. Among all kinds of dairy products, the fastest growing import is yogurt, followed by condensed milk and fresh milk. Specifically: (1) From January to November, the total import of liquid milk was 601,700 tons, a year-on-year increase of 48.01%. According to this growth rate, the annual liquid milk import was close to 700,000 tons; the import value was 628 million US dollars, year-on-year An increase of 38.87%. Among them, the import of fresh milk was 482,300 tons, a year-on-year increase of 46.48%. Yogurt imports were 19,400 tons, a year-on-year increase of 115.84%. Following the first time in 2015 that yogurt imports exceeded 10,000 tons, it may double in 2017 to more than 20,000 tons. (2) From January to November, the import volume of dry dairy products totaled 1.1193 million tons, an increase of 14.63% year-on-year; the import value was US $ 2.46 billion, a decrease of 0.48% year-on-year. Among them, the import of milk powder was 558,800 tons, an increase of 9.06% year-on-year, and the import value was US $ 1.354 billion, a decrease of 4.01% year-on-year. The import of whey was 457,700 tons, an increase of 16.41% year-on-year; the import value was US $ 409 million, a decrease of 16.16% year-on-year. The cumulative import volume of cheese was 89,300 tons, an increase of 30.90% year-on-year; the import value was US $ 385 million, an increase of 21.98% year-on-year. The cumulative import volume of butter was 75,400 tons, an increase of 20.96% year-on-year; the import volume was US $ 279 million, an increase of 17.68% year-on-year. (3) From January to November, the import volume of forage grass and hay has accumulated to 1,536,900 tons, an increase of 22.75% year-on-year; because of the decline in the average price of forage grass, the import value has decreased by 0.91% year-on-year to USD 479 million. (4) The number of imported dairy cows decreased from January to November, and the import prices also dropped significantly. Imported bulls were 108,348 heads, a decrease of 17.7% year-on-year; imports were US $ 202 million, a year-on-year decrease of 40.8%, and the average price was US $ 1,863 per head, a year-on-year decrease of 28%.
The proportion of large-scale breeding continues to increase
Small and medium-sized farmers have always been a blind area for policy support, and the low milk prices, restrictions, and rejections encountered when selling raw milk to dairy companies are also normalized. Affected by multiple factors such as a weak consumer market, squeezing imported dairy products, weak policy support, discrimination by dairy companies, and rising farming costs, small and medium-sized farmers are facing an increasingly severe living environment. After more than two years of continuous downturn, the bankruptcy of small and medium-sized farmers is very common. The dairy farming situation has changed from “difficult to sell milk” to the withdrawal of farmers from large numbers, which has promoted the transformation of breeding structure. According to the survey conducted by the National Dairy Industry Technology System Industrial Economic Research Office in Hebei and other places, the number of pastures (communities) and the number of inventories are decreasing, and the milk output is also decreasing. At the end of 2014, there were 32 dairy farms (communities) in Qingyuan District of Baoding City, which was reduced to 28 by the end of 2015. There were 27 remaining as of September 2016, and another family ranch is withdrawing. With the acceleration of community-to-ranch conversion, many community farmers have withdrawn. The drop in the number of farming households is also prominent in other survey areas. Among them, there are more than 20 farming households in Fengnan District of Tangshan City, and there are only 12 left now; there are only 6 farms in Hangu Farm, and there are only 2 left. While small-scale farmers (including those entering the community) have accelerated their withdrawal, the number of large-scale pastures has increased steadily. Although the market environment is difficult, large-scale pastures generally have expectations for the future market, not only insisting, but also actively expanding the group and accumulating production capacity. According to the monitoring data of the national dairy industry technology system, the number of cows on the monitoring farm increased by 4.0% in November 2016 compared with the beginning of the year. Overall, the withdrawal of free-range farmers and small-scale farmers and the expansion of large-scale farmers have brought about a shift in the overall production structure of the dairy farming industry.
2017 China's dairy industry economic situation outlook
The price of raw milk will continue to rise
The main reason for the round of fresh milk purchase price recovery is that after the international dairy market continues to adjust, the supply-demand relationship tends to balance, and the international market milk prices have started to strengthen. As can be seen from Figure 1, since April, the FAO dairy price index has continued to rise, from 127.4 points to 186.4 in November. With the increase in the purchase price of raw milk, the plight of the domestic dairy farming industry has been eased, reflecting the milk-to-feed ratio of the dairy farming economic environment, that is, the price of raw milk and feed (refer to the IFCN standard, the comprehensive feed price is the price of corn and soybean meal) Weighted average, the weights are 70% and 30% respectively.) The ratio has also increased significantly, rising from 1.33, the lowest point in July, to 1.43 in mid-December.
This round of rising milk prices in the international market is the result of adjusting production capacity to achieve a balance between supply and demand. Due to the still slow growth of the world economy, it is difficult for the dairy industry's consumption demand to grow significantly. In the short term, demand factors will not have a significant effect on the rise in milk prices. At present, the international dairy market has generally been adjusted to profitability. Driven by the rebound in milk prices and the decline in feed costs, the milk-to-feed ratio in the international market has rebounded to more than 1.5. The growth of international milk prices lacks follow-up momentum and is expected to increase slightly After stabilizing. From figures 1 and 2, the growth of the FAO dairy price index and the IFCN milk-feed ratio has slowed. The domestic raw milk purchase price has continued to rise since August, which is four months behind the time when the international dairy price rebounded. There should be no significant decline in the short term. It is expected that there will be further growth in 2017, but there is little room for growth .
The dairy consumer market will continue to maintain a stable trend
Due to the significant correlation between dairy product output and dairy product consumption, dairy product output data can be used to a large extent to measure dairy consumption. According to data released by the National Bureau of Statistics, from January to November 2016, the national liquid milk production was 29.49 million tons, an increase of 8.1% year-on-year. If calculated based on the sum of domestically produced liquid milk and imported liquid milk, the consumption of liquid milk from January to November exceeded 25.592 million tons, a year-on-year increase of 10.76%. From January to November 2016, the national output of dry dairy products was 2.30 million tons, a year-on-year decrease of 8.42%. On the whole, consumer demand for dairy products has increased in 2016, and it is expected to maintain a steady growth momentum in 2017.
There may be a slight correction in the total amount of dairy imports
In 2016, the import of almost all kinds of dairy products reached historical highs, and it is expected that the import of dairy products will basically stabilize at this level in 2017 or a slight correction. The main basis for this judgment is: (1) The consumption demand for dairy products will only increase slightly in 2017; (2) With the purchase price of raw milk rising, domestic raw milk production capacity and output will increase to a certain extent However, it will not be too large. In the short term, farms lack the ability to increase output significantly; (3) The stabilization of the international dairy market and the rebound in milk prices will inhibit import growth to a certain extent. However, subject to resource constraints, in the long run, China's dairy self-sufficiency rate will continue to decline, and its dependence on the international market will become higher and higher.
Raw milk quality risk control needs attention
During the downturn of the market, dairy processing enterprises control the amount of milk collected by raising the quality standard of milk collection, and the quality of raw milk entering the processing is generally high. Since the second half of 2016, as supply and demand have been tight, processing companies have also relaxed their quality index restrictions when purchasing raw milk. For example, according to surveys in some areas in Hebei, the standards for the number of colonies and somatic cells that have been set in the past two years have been no longer enforced. The relaxation of quality indicators may play a role in alleviating the shortage of milk sources, and is beneficial to the realization of the normal interests of farmers, but the potential risks in terms of quality and safety should still be guarded against.
2017 China's dairy industry economic development recommendations
The dairy industry in 2016 is still in a severe winter period, especially the development of dairy farming is extremely difficult. Due to the squeezing of price ceilings and cost floors, as well as the dual constraints of resources and environment, especially the implementation of the new environmental protection law, the future development of the dairy industry will face more severe challenges. In 2017, the development of the dairy industry should closely focus on the spirit of the Central Economic Work Conference and the Rural Work Conference, and implement structural reforms on the agricultural supply side in the three aspects of structural adjustment, stabilizing production capacity, and promoting income growth. To this end, the following recommendations are made:
Unswervingly adjust the structure
Structure adjustment is an urgent and long-term historical task facing the dairy industry in the coming period. One is to continue to promote the structural adjustment of the planting industry and take the development path of integration of cultivation and breeding. The scale of "grain to feed" and "grain to grass" should be gradually expanded to allow the planting industry and the dairy farming industry to form a benign interaction and a virtuous cycle of industrial development models. The organic integration of farming and aquaculture is not only a common practice and experience in developed countries, but also an intrinsic requirement for China to develop a modern dairy farming industry. Taking the farming road of "integration and breeding", while ensuring the basic self-sufficiency of high-quality roughage on dairy farms, it can also return 100% of manure to the field, which can not only reduce the cost of breeding, but also improve the quality of raw milk and reduce it. Environmental pollution can be said to serve multiple purposes. The second is to continue to promote the adjustment of milk source structure and take the development path of diversified milk source supply. On the basis of stable dairy cow production, we should vigorously explore the production potential of different dairy animals, and support and develop the production potential of dairy goats, milk buffalo, milk yak, milk sheep, and dairy cows, etc. according to local conditions. Milk market supply can effectively resist foreign competition. The third is to continue to promote the structural adjustment of dairy products and take the development path of product differentiation. Whether in the short-term or long-term view of China's dairy industry, it is very necessary to form an industrial pattern with both division of labor and cooperation with the international market. The focus of the dairy product structure adjustment is to fight the battle between the two markets of liquid milk and infant formula milk powder, let Chinese adult consumers drink Chinese original liquid milk, and let Chinese infants and young children eat Chinese original milk powder.
Unswervingly stabilize production capacity
Stable milk supply is the basis for stable industry development. Only when the milk supply is stabilized can the dairy industry embark on a sustainable and healthy development track. Since 2014, due to the unfavorable factors in both domestic and international markets, China's dairy industry has entered a cold winter, and it has been "difficult to sell milk" in the breeding sector and "difficult to sell milk" in the processing sector. In 2016, China's dairy industry actually moved forward in the "dilemma". The cold winter of China's dairy industry is essentially the cold winter of the breeding sector. Small and medium-scale breeding, breeding communities, and even some large-scale breeding are facing a huge test of survival. Within the breeding sector, the survival of small and medium-sized pastures and breeding communities is more difficult. Therefore, in the coming period, the primary task of stabilizing production capacity is to stabilize the production capacity of raw milk in small and medium-sized pastures and breeding communities. This kind of breeding main body occupies half of China's dairy farming industry. Stabilizing this type of farming entity is to stabilize production capacity, and protecting this type of farming entity is to protect the future of China's dairy industry. Therefore, the support policy for the dairy industry in the future should be tilted toward the breeding sector, and the support policy for the breeding sector should be tilted toward small and medium-sized pastures and breeding communities. When purchasing raw milk, dairy processing enterprises should price them on the basis of quality, and should abolish price discrimination policies on small and medium-sized pastures and breeding communities.
Unswervingly promote income growth
Promoting increased income is to increase the income of dairy farmers, especially small and medium-sized pastures and breeding communities. There are many factors that affect dairy farmers' income, such as technical, institutional, and policy factors. Among them, for dairy farmers, technical factors are intrinsic, while institutional and policy factors are external. The internal problems can be solved by the dairy farmers themselves, however, the external problems cannot be solved by the dairy farmers themselves. Therefore, in the coming period, the primary task of increasing income is to help dairy farmers solve externalities. The essence of solving the externality problem is to straighten out the benefits distribution of different business entities along the industrial chain. At present, the Chinese dairy industry generally implements the "company + milk station (cooperative) + farmer (farm)" industrialized business model. The company, milk station (cooperative), and farmer are three independent business entities, representing There are three different interest groups. During the game of interest, both dairy companies and milk stations can pass on the operational risk to the dairy farmers, so the dairy farmers naturally become vulnerable groups. The unfair distribution of the benefits of the three business entities is the biggest problem and challenge facing China's development of modern dairy industry. In terms of long-term development, we should learn from the practices and experiences of developed countries and establish a stable mechanism for increasing incomes of dairy farmers from the perspective of system and policy design, so that farmers and the “vulnerable groups” in the dairy industry can say goodbye.
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