Chinese dairy farms face closure due to overexpansion, cheap imports

World Today

A crisis is churning in China’s dairy industry as many dairy farms are dumping milk, scaling down, or even shutting down completely due to over-expansion and cheap imports — despite the fact that milk production and consumption have been rapidly rising in China. CCTV’s Ning Hong reported this story from North China’s Hebei Province.

Chinese dairy farms face closure due to overexpansion, cheap imports

A crisis is churning in China's dairy industry as many dairy farms are dumping milk, scaling down, or even shutting down completely due to over-expansion and cheap imports -- despite the fact that milk production and consumption have been rapidly rising in China. CCTV’s Ning Hong reported this story from North China's Hebei Province.

Since 2013, the rising price of fresh milk has led to an excessive expansion of dairy farms in North China’s Hebei Province. At Jun Lebao, the largest dairy company in Hebei, supply doubled in 2014, but it lost a 100 million RMB ($16.1 million), said Feng Jinmao a spokesperson for the dairy.

In 2014, one-third of the raw milk consumed in China was imported. One ton of Chinese milk powder is 40,000 RMB ($6,456), while imported milk powder is only half that price.

This has led many domestic dairies to close. Jin Niu Dairy farm once had more than 500 cows, and now it is forced to close, as did five other farms in Yuanshi County in the province.

“Our contract with a dairy company ended June last year, but we kept on selling them milk until December, then they refused to buy milk after that. We had twelve tons of milk, we were dumping one ton a day,” Feng Jingyan of Yuanshi kang Feng dairy farm said.

For smaller dairy farms, it will be a tough winter, if they survive at all.