Two forces are coming together that are going to have a major impact not only on the North American dairy industry but on global dairying as well. On the one hand, after generations of being in the forefront of the global dairy industry, North America is being joined by other expanding dairy economies. In the 21st Century exponential growth in dairy consumption means that countries such as China, India and Vietnam are assimilating dairy practices from market leaders and leapfrogging to the top.
As the momentum picks up, headlines monitor the changes. “China Grows Its Dairy Farms “and “Emerging Dairy Markets in India “. It isn’t surprising therefore to see large agricultural marketing companies entering these markets, sending in products and partnering in on-site development. Commercial representatives and government fact finding missions are reporting back that the potential is enormous. Meanwhile on the home front, progressive dairy members are keeping pace through international exchanges of students, set-up expertise and, of course, dairy products. It isn’t unusual to be exposed to seminars, panelists and big picture visionaries who are making presentations on every aspect of this growth. The message is repeatedly reinforced that China, India, Asia and Africa are not only improving their own dairy industry balance sheets but providing profit potential for North American dairy exports – real and intellectual—as well.
Over the past 40 years I have had mostly arm-length exposure to what dairying in these locations has included. It is exciting to hear the vast potential that is being recognized today. It can be compared to the way countries have leapfrogged from the not having even basic telephone systems to the smart phone generation. Using that as the comparison and you will have some idea of how dairy technology is moving ahead by leaps and bounds.
Already dairy and crop farming are looking more like the North American model as they move forward. Farmers in Asia are able to skip the generations of evolution that Europe and North America look back on. They are not constrained by having to build tie stall barns. They have the advantage of seeing the benefits of going directly to freestalls and milking parlors. Even in countries such as Africa where progress is more likely to use the freehold model, they are benefiting from the tools, genetics and science of modern farming. The advice and role models, so easily shared with modern communication, can be applied to the type of efficient grass converting animal, high quality feed and accessible practices that will make it possible to keep people productively working in the countryside, instead of joining the city poor.
Many years ago, on the crop farming side, I witnessed firsthand the bottleneck that under-mechanization makes. We were visiting Africa and representing the good intentions and good will of the North American dairy industry. In Zimbabwe farmers were not able to keep the wonderful tractors running. All too soon they would find themselves running out of draw pins or other small parts (not accessible) and the whole team had to revert to hand tools for planting, maintaining and harvesting crops. The very real threat of starvation is always a bigger priority than unsustainable mechanization.
Today, whether it’s through equipment subsidies as was done in China or through supporting input costs or crop prices as was done in India, mechanization is moving forward. Granted there are still many fields tilled by hand or using oxen but there is progress from walk behind tillers to mid-size tractors. Some big name North American farm equipment dealers are moving with the times in these developing countries. John Deere manufactures mid-size 80 and below horsepower tractors in India and China. To put this in perspective, you have to recognize that China has over 90 percent of the corn acreage of the U.S. even though the yields are much lower. First mechanization. Then these countries are in a position to turn their attention to crop and soil science and animal genetics. This spins off into consumer desire for more fresh milk, Farmers, with the aid of governments and outside expertise, are meeting the demand by building 1,000 cow dairies that are comparable to those found stateside.
Threat or Opportunity
Let’s consider that China has the third largest cattle herd and is the second largest milk producer. India is the largest milk producing country in the world and could even overtake the European Union by 2020. At first glance, this growing independence may seem like a double threat. First they will require fewer imports. Secondly they will become competitors in the marketplace. However the discerning global watcher recognizes there is an even bigger change that is having the biggest impact of all. It’s happening because of changes in the diets of consumers in every one of these countries. Consumer demand for dairy products and protein is far outstripping the ability of their own country to provide for all their needs. That is the first opportunity for the developed world. Other opportunities range from being mentors to help support this growth to becoming actual partners in overseas operations. There is such a steep learning curve for countries who are undertaking modern dairy practices that it takes more than internet searches and a few weeks of visiting market leading operations. Then they have to go beyond accommodating best management practices. Many of these countries have climate challenges. Climate affects not only the cropping side tut also the milk production potential of the cattle. The goal is healthy, high producing cows but, while great strides can be made by adapting equipment and modifying building styles, the same is not so readily converted when it comes to animal genetics, nutrition, health and reproduction.
China Has a Growing Thirst for Milk
As an example of how living standards and changing consumer tastes are impacting dairying, you need only look to China. The former Chinese Premier, Wen Jiabao, used milk as a symbol for China’s rising wealth and living standards. In 2006 he declared that it was his goal to ensure that all Chinese people could get enough milk. Eight years later progress has been steady with per capital liquid milk consumption rising from 1 kg per head in 2000 to 9.4 kg in 2011. Furthermore, in the past four years demand for milk has consistently outstripped supply, with prices rising at an average of 12 percent a year. Having said that, it might seem counter-intuitive that it is expected that the population of milkable cows in China could fall from around 14.5 million in 2012 to 14.2 million in 2013.
The Bullvine Bottom Line
The scenario taking place in China is one example of the tremendous growth in dairying that is occurring in many countries around the world. As the fortunes of dairymen change in those markets, there is a corresponding impact on dairy farming in North America and Europe. In each market the goal is to supply consumers with quality food, dairy training, cattle genetics and technology.
The gaps are definitely closing. There is potential for everyone to move forward.
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