The raw milk supply was still in shortage in 2012, and milk price stayed on high level. However, to compare with 2011, profits in dairy cattle farming declined significantly and even presented deficit because of big feed cost increase. Poor margin have forced many small farmers to give up dairy cattle farming in 2012. Community farming is expected to transform into professional farming modes like large-scale farm or dairy cooperative; and the proportion of large-scale dairy cattle farming in China will further expand.

1. China Cattle Farming & Dairy Industry Analysis and Forecast Report 2012 - 2013
In 2012, China's dairy cattle farming and dairy industry mainly showed the following characteristics and
changes: The raw milk supply was still in shortage in 2012, and milk price stayed on high level. However, to
compare with 2011, profits in dairy cattle farming declined significantly and even presented deficit because of
big feed cost increase. Poor margin have forced many small farmers to give up dairy cattle farming in 2012.
Community farming is expected to transform into professional farming modes like large-scale farm or dairy
cooperative; and the proportion of large-scale dairy cattle farming in China will further expand. Large-scale
dairy cattle farming have been developing rapidly in China. In 2012, the number of dairy farms with inventory
of over 1,000 heads has exceeded 1,200, among which about 50 large dairy farms (including farms in plan,
under construction and in operation) individually have inventory of over 3,000 heads, and over 10 super large
dairy farms respectively own inventory of 10,000 heads. Dairy cattle farming will expand demand for
automatic equipments like in feeding and milking. Meanwhile, manure pollution will become the major factor
to restrict development of the industry. In 2012, alfalfa hay consumption showed growth and the import
volume reached 0.45 million MT, accounting for over 60% of national consumption. Meanwhile, there are
some new changes in dairy industry: In 2012, dairy products output and imports both increased greatly and
respectively reached 25.45 million MT and 1.15 million MT; the output of liquid milk and solid dairy products
kept increasing and respectively reached 22.4 million MT and 1.57 million MT; the supply and demand was
generally balanced. In 2012, China's UHT milk imports sharply increased - doubled 2011 and reached nearly
94,000 MT; The number of imported UHT milk brands exceeded 30. In the Chinese infant formula market,
foreign brands covers 60-70% market share; the number of foreign brands has even exceeded 100. Meanwhile,
overseas purchasing service for infant formula has been developing drastically and contributes about 10% of
the national consumption. Many international dairy giants like Fonterra, Danone, Nestle and Arla Foods have
been expanding investment and development in China. We predict the dairy industry development in 2013 to
go along the following trends: more small farmers quitting the industry; the proportion of large-scale dairy
farming in dairy farming industry to further increase; the domestic raw milk supply to keep ascending; total
dairy imports to increase slightly; the dairy production capacity to continue to expand. Generally speaking,
domestic raw milk shortage will not be well eased, and dairy supply and demand will be balance in 2013.
This annual report will comprehensively and systematically analyze the trends and changes in the Chinese
dairy market in 2012 with detailed and accurate data and will also forecast the development in 2013.
table Of Content
part One: 2012 Dairy Cattle Farming In China
1.1 Dairy Cattle Inventory And Raw Milk Output
1.1.1 Dairy Cattle Farming Distribution
1.1.2 Small Expansion Of Dairy Cattle Inventory
1.1.3 Slight Increase Of Per-cow Milk Yield
1.1.4 Slight Increase Of Milk Yield
1.2 Dairy Cattle Farming Cost And Profit
China Cattle Farming & Dairy Industry Analysis and Forecast Report 2012 - 2013

2. 1.2.1 Big Pressure From Dairy Cattle Farming Cost
1.2.2 Dairy Cattle Farming Profit Relatively Low
1.2.3 Comparative Analysis Of Dairy Cattle Farming Cost And Profit In Major Provinces
1.3 Characteristics Of Dairy Cattle Farming In China
1.3.1 Dairy Cattle Farming Mainly Relies On Small Farmers
1.3.2 Large-scale Farming Mainly In Farming Community Mode
1.3.3 Low Proportion Of Automation In Dairy Cattle Farming
1.3.4 Low Proportion Of High Quality Raw Milk, Especially Organic Raw Milk Less Than 1%
1.4 Influence Of Dairy Cattle Farming Related Policies In China
1.4.1 Beginning Implementation Of Alfalfa Planting Subsidy
1.4.2 Continuous Implementation Of Subsidy For Superior Varieties
1.4.3 Continuous Supporting Construction Of Standardized Farming Communities
part Two: 2012 Dairy Industry Analysis In China
2.1 Dairy Output
2.1.1 Dairy Output Drastically Increased To 25.45 Million Mt
2.1.2 Increase Of Liquid Milk, Milk Powder And Other Solid Dairy Products Output
2.2 Distribution Of Dairy Production
2.2.1 Distribution Of Dairy Production By Province
2.2.1.1 Dairy Enterprises In Different Provinces
2.2.1.2 Dairy Production Capacity By Province
2.2.1.3 Dairy Output By Province
2.2.2 Distribution Of Liquid Milk Production By Province
2.2.3 Distribution Of Milk Powder & Infant Milk Powder Production By Province
2.3 Influence Of Dairy Industry Related Policies In China
2.3.1 New Vat Input Tax Offset Method For Dairy Processing Industry
2.3.2 Growth Of Cow Colostrum Market Size To Slow Down In Coming 2-3 Years
part Three: 2012 Dairy Farming & Dairy Import & Export
3.1 Hay Import And Export
3.1.1 Hay Imports & Exports In 2012
3.1.2 Alfalfa Import Volume & Price In 2012
3.2 Dairy Cattle Import
3.2.1 Dairy Cattle Imports Reached 0.13 Million Heads In 2012
3.2.2 Uruguay Originated Cattle As 30,000 Heads Or Over 20% Of Total Imports
3.3 Dairy Trade
3.3.1 Dairy Imports Increased Significantly
3.3.2 Non-fermented Liquid Milk Import And Export
3.3.2.1 Liquid Milk Imports Reached 0.1 Million Mt, Far Higher Than Exports
3.3.2.2 Liquid Milk With 1-6% Fat Content As The Major Import Category
3.3.2.3 Imports From Germany And Australia Up Greatly
China Cattle Farming & Dairy Industry Analysis and Forecast Report 2012 - 2013

3. 3.3.3 Milk Powder Import And Export
3.3.3.1 Milk Powder Imports Amounted To 0.57 Million Mt
3.3.3.2 Smp & No-added-sugar Wmp Still As Major Import Categories
3.3.3.3 Milk Powder Import Price Still On High Level
3.3.3.4 New Zealand Originated Milk Powder Up Significantly
3.3.4 Whey Powder Import
3.3.4.1 Whey Powder Imports Increased
3.3.4.2 Import Whey Powder Mainly From Us & Eu
3.3.4.3 Whey Powder Import Price Rose To 1956 Usd/mt
3.3.5 Cheese Import
3.3.5.1 Cheese Imports Increased To 40,000 Mt, Up 36% From 2011
3.3.5.2 Import Cheese Mainly From New Zealand, Australia And Us
3.4 Dairy Related Products Import
3.4.1 Casein Import
3.4.2 Whey Protein Concentrate (wpc) Import
3.4.3 Lactose Anhydrous Import
3.4.4 Ice Cream Import
3.4.5 Infant Food Import
3.4.6 Special Infant Formula Import
3.5 Influence Of China Dairy Import Policies
3.5.1 China "2013 Tariff Implementation Scheme"
3.5.2 Tariff Down Causes Limited Impact On Infant Formula Market Price
3.5.3 Overseas Purchasing Volume Of Infant Formula May Drop
3.5.4 Imports Of Special Infant Formula To Grow Significantly
part Four: 2012 Raw Milk & Dairy Consumption In China
4.1 Characteristics Of Raw Milk Consumption
4.1.1 Raw Milk Mainly From Milking Stations
4.1.2 Higher Proportion For Uht Milk Production, Proportion For Milk Powder Similar To 2011
4.1.3 Cost Difference Between Domestic And Import Raw Milk In Infant Formula Production Lessened
4.2 Characteristics Of Dairy Consumption
4.2.1 Uht Milk's Proportion In Liquid Milk Consumption Increased
4.2.2 Quick Development Of High-end Liquid Milk Market
4.2.3 Infant Formula Consumption Still Concentrated On Foreign Brands
4.3 Dairy Consumption Volume
4.3.1 Changes In Uht Milk Consumption Volume In China
4.3.2 Changes In Yogurt Consumption Volume In China
4.3.3 Changes In Pasteurized Milk Consumption Volume In China
4.3.4 Changes In Milk Powder Consumption Volume In China
4.3.5 Changes In Infant Formula Consumption Volume In China
China Cattle Farming & Dairy Industry Analysis and Forecast Report 2012 - 2013

4. part Five: 2012 Prices Of Raw Milk & Dairy Products And Dairy Product Processing Margin
5.1 Raw Milk Price On High Level
5.2 Changes In Liquid Milk Products Prices
5.2.1 Changes In Uht Milk Price
5.2.2 Changes In Yogurt Price
5.3 Changes In Milk Powder Price
5.3.1 Changes In Domestic & Foreign-brand Infant Formula Prices
5.3.2 Changes In Adult Milk Powder Price
5.4 Changes In Fonterra Dairy Products Auction Prices
5.4.1 Changes In Milk Powder Auction Price
5.4.2 Changes In Amf & Cheese Auction Prices
5.5 Dairy Production Cost And Benefit
5.5.1 Big Pressure From Dairy Processing Cost
5.5.2 Processing Margin & Net Profit Margin Both Increased
part Six: 2012 Major Dairy Farming And Dairy Producing Enterprises In China
6.1 Top 20 Dairy Farming Enterprises
6.1.1 Distribution
6.1.2 Production Concentration Ratio
6.1.3 Farming Scale
6.1.4 New Large-scale Dairy Farms In 2012
6.2 Top 10 Uht Milk Enterprises (groups) In China
6.2.1 Distribution
6.2.2 Production Concentration Ratio
6.2.3 Raw Milk Sources
6.2.4 Product Level
6.2.5 2012 New Developments Of China Liquid Milk Market
6.3 Top 15 Infant Formula Enterprises In China
6.3.1 Distribution
6.3.2 Production Concentration Ratio
6.3.3 Raw Materials Sources
6.3.4 Product Level
6.3.5 2012 New Developments Of China Infant Formula Market
part Seven: Forecast On 2013 China Dairy Farming & Dairy Industry Development
7.1 Forecast On Dairy Farming And Raw Milk Production
7.1.1 Dairy Cattle Farms Above Designated Size To Cover 40% Of National Dairy Cattle Inventory
7.1.2 Dairy Cattle Inventory To Reach 14.5 Million Heads, Raw Milk Output 38.8 Million Mt
7.1.3 Raw Milk Shortage To Reach 3-4 Million Mt
7.1.4 Raw Milk Price To Stay On High Level
7.1.5 Dairy Farming Cost Around 15,000 Rmb/head
China Cattle Farming & Dairy Industry Analysis and Forecast Report 2012 - 2013

5. 7.1.6 Dairy Farm Margin To Be 2,000 Rmb/head
7.2 Forecast On 2013 China Dairy Output
7.2.1 Dairy Output To Increase To 28 Million Mt
7.2.2 Liquid Milk Output To Increase To 23 Million Mt
7.2.3 Milk Powder Output To Stay Around 1.4 Million Mt
7.3 Forecast On 2013 Dairy Cattle & Dairy Products Import And Export
7.3.1 Alfalfa Imports To Reach 0.6 Million Mt
7.3.2 Dairy Cattle Imports To Stay Around 0.13 Million Heads
7.3.3 Dairy Products Imports To Keep Growing
7.3.4 Milk Powder Imports To Exceed 0.6 Million Mt, Import Price To Grow
7.3.5 Whey Powder Imports To Reach 0.4 Million Mt
7.3.6 Cheese Imports To Reach 45,000 Mt
7.3.7 Liquid Milk And Milk Powder Exports To Increase Slightly
7.3.8 Forecast On 2013 Imports Of Dairy Related Products
7.4 Forecast On 2013 China Dairy Consumption
7.4.1 Dairy Consumption Volume To Reach To 30 Million Mt
7.4.2 Dairy Products Prices To Stay On High Level
7.5 Forecast On 2013 Raw Milk Supply And Demand In China
7.6 Forecast On 2013 Dairy Products Supply And Demand In China
addendum: Events In China Dairy Industry In 2012
policies & Announcements
product Safety Events
investment & Merger
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China Cattle Farming & Dairy Industry Analysis and Forecast Report 2012 - 2013