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CCM: Domestic alfalfa production shell save China’s dairy market


China is trying to satisfy the demand for high-quality food of its growing middle-class, like meat and dairy products. However, China’s domestic manufacturers are facing struggle currently, unable to compete in the market with the cheap imports, due to domestic high production costs. One focus of China’s government to improve the dairy industry is the promotion of domestic produced high-quality alfalfa as the main feed for grazing livestock.


Source: Pixabay


China’s agricultural sector, which is the largest in the world, is heavily depending on grain at the moment. The government is trying to promote the production of higher quality food for the growing middle class. This is part of the plan to implement a more sustainable farming situation in China in general, by promoting organic production and more efficient use of pesticides and water.


The Chinese government has embraced the plan of using high-quality alfalfa to ensure the production of high-quality dairy products. However, the domestic supply is much underneath the growing demand for alfalfa, which opens the door to overseas exporters getting a good share in the expanding market. Alfalfa production is backed up by China’s Ministry of Agriculture, granting a good amount of state subsidies for domestic high-quality alfalfa production.


The overall plan for the future trend of alfalfa in China is written down in the National Alfalfa Industry Plan from 2016-2020. CCM has outlined the most important changes to the alfalfa industry and the effect on the dairy industry in China as the result of it. 



The high production costs of milk in China are mainly caused by the costs of feed. According to the report, China’s farmers count about 60-70% of the production costs of milk for feed. As a huge importer of Alfalfa, China’s demand is still rising by an enormous amount of almost 20% year on year.


Speaking of the imbalance of supply and demand, China’s domestic supply shortage of alfalfa has been over 1.3 million tonnes in 2015, with a rising trend. It is expected, that by the year 2020 the alfalfa production in China will reach 1.2 million tonnes. However, that supply will likely face a demand of more than 6.3 million tonnes. In addition to that, the product quality of Chinese alfalfa is very changeable while the production process show fragmented steps without good coordination.


According to China’s plan for the alfalfa industry, the focus of planting and production will be set on the traditional planting areas in the north and west of China. Farmers and manufacturers will be encouraged and educated by improving the processing and commercialization as well as increase the constructions of more and enhanced production bases.


Finally, the plan reaches to create a new planting area of alfalfa in northern China by 0.2 million ha with a total unit output of p tonnes per hectare. A total output of 1.8 million tonnes should be possible, with a self-sufficiency of about 80%. All the before mentioned measurements are supposed to lower China’s dependence on expensive alfalfa imports and as a result reduce the production cost of feed and finally also milk in China.


Alfalfa, sometimes also called Lucerne, is a worldwide cultivated legume, which can be harvested 4 to 6 times a year. It is used mainly for livestock forage and is famous for its pest resistance and robustness,


About CCM

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets.


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