CHINA – China Dairy Has Lowest Quality Standards – June 20, 2011

CHINA – China’s dairy industry has the lowest quality standards in the world and much of the blame is down to the large companies that dominate it and the rock-bottom prices they pay farmers for raw milk, industry experts told China Daily.

“Milk processors and farmers all know that the problems of low protein content and high bacteria counts in milk are easy to solve with money but they have instead reduced investment because of the low profit margins,” said Wang Dingmian, the former vice-chairman of the Guangdong Provincial Dairy Association.

Mr Dingmian told China Daily on Sunday that, if cows are fed enough, the protein content of the milk they produce would rise within a week. He said dairy farmers have instead reduced the amount of feed they give their animals because of the low price they get from the big dairy companies for the milk they produce.

The high bacteria count in milk is also caused by insufficient capital investment.

“The prolonged duration and high temperature during milk processing has caused the multiplication of bacteria in the milk,” he said.

China relaxed its national milk quality standards in 2010, increasing the maximum limit of bacteria acceptable in raw milk from 500,000 per milliliter to 2 million per milliliter and lowering the minimum requirement for protein content from 2.95 grams per 100 grams of milk to 2.80 grams.

Statistics show that international standards for protein content call for 3 grams per 100 grams of milk. The acceptable amount of bacteria in raw milk in Europe is 100,000 per milliliter.

“The revised standards for raw milk, normal-temperatured milk and pasteurized milk were drafted by two Chinese dairy giants – Mengniu Dairy Co Ltd and Yili Industrial Group,” Mr Dingmian said.

Food safety experts claimed the dairy giants helped ensure there were looser standards in place because some of their branch plants could not meet higher standards.

“It’s common that branches don’t keep up with the standards of the parent company,” said Sang Liwei, a food-safety lawyer and the China representative of the NGO Global Food Safety Forum.

In April, 251 children at Yuhe township primary school in Yulin, Shaanxi province, fell ill after drinking school milk manufactured by one of Mengniu’s local plants in the province. Test results released later said the milk met China’s national standards.

“This shows the national standards for milk quality are imperfect,” Mr Liwei said.

“A lot of bacteria in milk may mean microbiological problems occur more easily,” Mr Liwei said. “If companies handling the milk do not strictly follow procedures for the storage and transportation of the milk, there will be food safety incidents.”

Mr Dingmian suggested that a flexible policy be brought in under which high prices are paid to farmers for high-quality milk, so farmers are motivated to ensure their farms produce better quality raw milk.

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SOUTH KOREA – Measures Announced For Improved Disease Control – June 20, 2011

SOUTH KOREA – In early May, the Ministry of Food, Agriculture, Forestry & Fisheries (MIFAFF) announced measures to strengthen the country’s livestock disease controls.
USDA Foreign Agricultural Service

On 6 May 2011, MIFAFF announced measures to bolster the nation’s livestock disease controls that had been rocked during the recent foot and mouth disease (FMD) crisis where millions of livestock were culled to stem the spread of the disease.

The measures include: farm registration, minimum space requirements per animal, increased training, stronger FMD Standard Operating Procedures (SOPs), and cost sharing for vaccination expenses.

The government will help offset the costs associated with these new changes by drawing on the 1.6 trillion won (KRW; US$1.5 billion) set aside as part of the Korea-EU FTA countermeasures.

The most significant change for the local livestock industry will be the farm licensing system, which will be gradually instituted from 2012 through 2015. Registered farms must meet certain location and facility requirements. The larger scale farms will go first, followed by the medium-sized establishments and finally, the smaller enterprises.

By 2015, the plan is to have 90 per cent of beef cattle licensed, while nearly all the dairy cattle, swine and broilers will be covered. Nearly 10 per cent of the country’s beef cattle will not be licensed because of the large number of small operations (fewer than seven head) raising beef. According to the figures cited in the report, roughly 50 per cent of beef cattle farms have fewer than seven animals.

The licensing system also includes a minimum space requirement component, which could become a challenge for smaller operations that have limited capacity to expand barn or pasture size.

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CHINA – China’s Chief Vet Meets Fonterra CEO – June 16, 2011

CHINA – On 31 May 2011, Chief Veterinary Officer Yu Kangzhen met with New Zealand Fonterra Co-operative Group Global CEO Andrew Ferrier. They exchanged views on matters related to strengthening cooperation in the field of dairy industry.

Mr Kangzhen said he greatly appreciated the development of dairy cooperation between China and Fonterra, acknowledging the increase in NZ dairy exports to China.

Mr Kangzhen said that NZ could continue to help China in many ways:

  • Cooperation in supervision over quality and safety of fresh milk
  • Exchanges in breeding and improvement of dairy cows
  • Technical cooperation in quality and safety of fresh milk production
  • Demonstrations of large-scale dairy cow farming
  • Strengthening of dairy farmer training and technical skills

Mr Ferrier agreed with what Mr Kangzhen said, and noted that Fonterra would have closer cooperation and coordination with various authorities and regions through joint efforts for greater achievements.

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GLOBAL – Global Science Network Tackles Animal Diseases – June 17, 2011

GENERAL – In an innovative approach for the animal health sector, a global research network aimed at tackling some of the world’s most devastating animal diseases has been launched.

Bringing together thousands of scientists from research organisations across five continents, as well as the pharmaceutical industry and international animal health bodies, the network seeks to improve co-ordination of research activities to improve the control of the major current challenges and future disease outbreaks.

The Global Strategic Alliances for the Co-ordination of Research on the Major Infectious Diseases of Animals and Zoonoses (STAR-IDAZ) is funded by the European Commission and co-ordinated by the United Kingdom’s Department for Environment, Food and Rural Affairs (Defra).

Dr Timothy Hall, Head of Unit for Agriculture, Forestry, Fisheries and Aquaculture Research, European Commission, said as global trade and livestock movement becomes more prevalent, the risk of disease spread and associated economic, environmental and health consequences also increases.

“We need to initiate a co-ordinated, global approach to disease research so that we are tackling existing and emerging diseases in the best possible way. Through the STAR-IDAZ network, we hope to align our efforts and share the knowledge gained from research bodies and institutions across the globe.”

Dr Alex Morrow, Veterinary Science Team at Defra, said by having a formalised network the group can share information, establish common goals and collaborate on research needed to control current and emerging disease challenges.

“By working in partnership we can achieve much more than we would in isolation, where resources can often be quite limited. A global co-ordinated approach means that new research and new technologies can be identified quickly and made a reality as soon as possible to improve animal health and well being.”

Diseases of major concern include: Avian Influenza; Foot and Mouth Disease; new strains of Porcine Reproductive and Respiratory Syndrome Virus (PRRSV); and African Swine Fever.

The €1million EU-funded network will include the USA, Russia, Italy, Germany, France, Spain, Denmark, the Netherlands, China, India, Japan, Australia, New Zealand, Mexico, Argentina, Brazil, Canada and the UK. Other countries will feed in through regional networks being established in the Americas, Asia and Australasia, and in the future the Middle East and Africa. (Relevant international bodies such as the World Organisation for Animal Health – OIE – will also be associated.)

Pharmaceutical industry representatives in the STAR-IDAZ network will assist in identifying likely solutions that could prove viable for the animal health industry.

On behalf of the animal health industry, Pfizer Animal Health’s Peter Jeffries said the network launch represents a milestone in international disease research. “The global scope of this project will allow us to make significant progress in terms of infectious disease research, and bring about targeted and tangible control methods. We’re proud to be working alongside other animal health research bodies to ensure we are in the best position to tackle existing and emerging diseases around the world.”

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INDIA – Goa Dairy Increases Milk Price For Farmers – June 17, 2011

INDIA – Goa Dairy has announced a one rupee (Rs) per litre hike in the prices it pays to dairy farmers in Ponda.

According to the Times of India Goa Dairy has been hiking milk prices slowly since February 21 in order to meet the price rise of milk supplied from neighbouring states.

The cost of milk available to consumers in Goa has risen by Rs 4 since February. However, Goa Dairy did not increase the purchase price of milk that it procures from Goan dairy farmers.

Goa Dairy chairman Madhav Sahakari said that the one-rupee increase in price will be given to cow and buffalo milk suppliers. After taking charge in November 2006, the present board of directors has increased milk prices on six occasions.

Meanwhile, Goa Dairy’s managing director Sadanand Kulkarni said the increase in the purchase price will create an additional burden of Rs 14 lakh per month and Rs 1.64 crore per annum.

Goa Dairy presently sells 71,000 litres of milk per day in the Goan market. Of this, 33,000 litres of milk are supplied by local farmers, while 38,000 litres of milk are procured from neighbouring states. After this resolution, the dairy will pay Rs 21.48 per litre plus Rs 3.33 to Goan dairy farmers. Outstation dairy farmers will be paid 21.90 per litre, Mr Kulkarni said.

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NEW ZEALAND – Print This Page Fonterra To Tap Hong Kong Bond Market – June 17, 2011

NEW ZEALAND – Fonterra Cooperative Group, the world’s biggest dairy exporter, will look to tap Hong Kong investors for some 300 million renminbi in its first Chinese currency denominated bond issue.

The sale is the first of its kind for an Australasian company in Chinese yuan deliverable in Hong Kong, and the proceeds will be used to support growth in its Chinese business. HSBC will run the book and lead manage the sale.

Fonterra China president Philip Turner said the unit is growing rapidly, and expects to tap second- and third-tier cities over the next three years. It aims to triple the value of its Chinese market to US$70 billion by 2020.

“We see huge potential to expand the breadth of products we offer in China, as well as the geographical distribution of our customer brands and foodservice dairy products,” Turner said in a statement. “We are also exploring opportunities to produce and sell a range of premium value-added dairy ingredients for key customers on the ground in China.”

The sale comes a week after the dairy exporter flagged its first bond issue in Australian dollars. General Manager Treasury Stephan Deschamps said the renminbi issue is part of a strategy to spread its debt across different markets.

Fonterra has a 6,000-cow factory farm at Tangshan, in China and is planning a second such facility. It has agreed to a joint feasibility study with Indian Farmers Fertiliser Co-operative for a pilot dairy farm in India, the world’s second-most populous country after China.

Last month it bought a dairy farm in Brazil, which is expected to start producing milk by late 2014 with a total herd of some 3,300 cows.

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NEW ZEALAND – Strong Year Expected For NZ Meat & Dairy Exports – June 14, 2011

NEW ZEALAND – Broad-based, steady and sustainable demand for many agricultural commodities is expected to underpin New Zealand’s export income for the medium term, a Ministry of Agriculture and Forestry report shows.

The annual Situation and Outlook for New Zealand Agriculture and Forestry (SONZAF) shows New Zealand exporters are receiving historically high prices in foreign currency terms for beef, dairy, lamb, logs, timber and wool products, with the returns expected to continue into the medium-term.

MAF Director-General Wayne McNee says the steady pick-up in fortunes for the primary sectors is notable for its breadth and consistency.

“Adverse climatic events in New Zealand and other producing areas have had an effect in driving up some prices.

“But the majority of our primary sectors should be able to look forward to a period of sustained growth, which will enable recovery of balance sheets, reinvestment and some breathing space after a tough few years.

“As with all forecasts SONZAF is subject to unforeseeable factors such as extreme weather events and unexpected currency movements, but what it shows is that many of the sectors have their fundamentals in order and are well positioned to take advantage of strong international demand for our products.”

The relatively strong New Zealand dollar reduces the gains passed through to New Zealand farmers, growers and foresters. On the other hand, it also reduces the effective cost of imported rural inputs such as fertiliser.


Beef: New Zealand beef production is down about nine per cent this season as a result of reduced cattle numbers and lower carcase weights due to adverse weather.

Prices for New Zealand manufacturing beef in the key United States market reached historical highs during the 2010/11 season, due to reduced supply and strong demand.

In the medium term international beef supply is expected to increase, but still remain slightly behind growth in demand, underpinning higher average prices.

Dairy: Dairy production in the 2010/11 season started below expectations due to widespread spring drought and slowed rate of dairy conversions. However favourable autumn weather lifted milk solids production – continuing after SONZAF went to print – resulting in an estimated four per cent increase. A further four per cent increase in production is now expected in the 2011/12 season.

International dairy prices in the 2010/11 season were up due to strong demand. In the medium term increased supply is expected to moderate this.

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