China: 2024 Brings Toughest Year for Dairy Farmers in Two Decades
Source: The DairyNews
As Chinese raw milk prices continue to struggle in the lead-up to the high season, concerns are mounting among industry experts that 2024 may shape up to be the most challenging year for dairy farmers in the past two decades.
Anticipated to surpass the difficulties faced in the previous year, 2024 poses a significant challenge for farmers, especially those burdened with substantial debt, warns Song Huiting, Chairman at Jiahui Biotech based in Jiangsu province.
Contrary to the usual trend of raw milk prices peaking at the beginning of the year, certain regions are experiencing the lowest reference prices in the past six years, with an 11 percent drop from the previous year's figures. In the Inner Mongolia Autonomous Region, Hebei province, and eight other major milk-producing regions, the average price for raw and fresh dairy stood at CNY3.66 (50 US cents) per kilogram in the last week of December, according to China’s Ministry of Agriculture and Rural Affairs.
A dairy farmer in Hebei revealed that a government-backed industrial organization projected a reference price of CNY3.6 per kg in the first quarter, marking a 12 percent decrease from the previous year and closely resembling the prices seen in the first quarter of 2018 during the industry's last boom and bust cycle.
While the drop in prices has started to impact even larger, typically more financially stable ranches, there is some relief in the form of reduced prices for animal feed such as corn and soybean meal. However, the situation remains challenging, prompting some farm owners to consider strategic measures, including culling low-performing cows, sourcing local animal feed, and potentially divesting certain parts of their business to dairy processors to ensure sustained partnerships and acceptable pricing during these tough times.
Contrary to the usual trend of raw milk prices peaking at the beginning of the year, certain regions are experiencing the lowest reference prices in the past six years, with an 11 percent drop from the previous year's figures. In the Inner Mongolia Autonomous Region, Hebei province, and eight other major milk-producing regions, the average price for raw and fresh dairy stood at CNY3.66 (50 US cents) per kilogram in the last week of December, according to China’s Ministry of Agriculture and Rural Affairs.
A dairy farmer in Hebei revealed that a government-backed industrial organization projected a reference price of CNY3.6 per kg in the first quarter, marking a 12 percent decrease from the previous year and closely resembling the prices seen in the first quarter of 2018 during the industry's last boom and bust cycle.
While the drop in prices has started to impact even larger, typically more financially stable ranches, there is some relief in the form of reduced prices for animal feed such as corn and soybean meal. However, the situation remains challenging, prompting some farm owners to consider strategic measures, including culling low-performing cows, sourcing local animal feed, and potentially divesting certain parts of their business to dairy processors to ensure sustained partnerships and acceptable pricing during these tough times.
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