Due to insufficient consumer demand leading to a surplus of raw milk, the phenomenon of “dumping milk and killing cows” has appeared in many regions such as Hebei, Inner Mongolia, and Shandong. Many industry insiders predict that the price of raw milk may continue its downward trend in 2023.
Lao Li, a dairy farmer who has raised cows for more than 30 years in Suzhou City, Anhui Province, told Beijing Business Daily, “The daily fodder fee for a cow is about 80 yuan. You can lose hundreds of thousands of yuan a month, and with no hope of seeing a good market in the short term, you can only kill the cows and sell beef to stop the loss in time.”
At present, northern regions with large-scale dairy farming and sufficient supply, such as Hebei, Inner Mongolia, Shandong and other places, have begun to have the phenomenon of “killing cows by dumping milk”.
The supply continues to increase, but the lack of consumer demand leads to a temporary surplus of raw milk. According to the Financial Associated Press, by the end of 2022, the price of raw milk has dropped by 6% from the high point two years ago. At present, most small and medium-sized ranches are already overwhelmed by the background of high costs and weak demand. It is expected that the price of raw milk will continue to decline in 2023, and the losses of ranches may further expand.
“Beijing Business Daily” reported, “Hebei, Inner Mongolia, Shandong and other places in the northern region have already begun to experience the phenomenon of ‘dumping milk and killing cows’ in 2015.” Dairy farmer Lao Li said that farmed cows and milk are too expensive. Too much, the price of 3.85 yuan/kg can’t make much money, even if the downstream demand can’t keep up.
Lao Li started raising dairy cows in 1984, and started working as a dairy cow distributor in 2020. He traveled all over the country to purchase dairy cows and sold them to different channels according to their appearance.
Lao Li said, “I have a ranch client in Shanghai. There is no company to collect milk. Now I am paying hundreds of thousands of yuan a month. I can’t see the hope of the market improving in the short term. I have already sold less than half of the cows. I can only say that You don’t have to lose money if you sell the cows, but selling dairy cows as beef cattle doesn’t make up for the loss.”
Regarding the situation in the northern market mentioned by Lao Li, Zhang Mingyan, head of Inner Mongolia Dewang Agriculture and Animal Husbandry Technology Co., Ltd., said that Dewang Agriculture and Animal Husbandry mainly sells dairy cows to all parts of the country. More than 1,000 dairy cows produce milk, but due to the decline in the market, nearly half of the dairy cows have been converted into beef cattle for fattening in the past six months, but the market for beef cattle and milk is not good, and almost no cows and milk are harvested. “
The double festival holiday did not effectively boost the demand for raw milk. According to the Financial Associated Press, as of December 21, the price of fresh milk in 10 main producing areas including Inner Mongolia and Hebei was 4.12 yuan/kg, a year-on-year decrease of 4.2%.
The main reason for the continuous decline in the price of raw milk is that the weak demand has led to a periodic oversupply.
Looking ahead, many industry insiders predict that the price of raw milk may continue its downward trend in 2023. Dairy industry expert Song Liang said: “Domestic raw milk is determined by the relationship between supply and demand of mid-to-high-end dairy products. The current decline in overall demand for mid-to-high-end dairy products will inevitably lead to a decline in the price of raw milk. Now many animal husbandry companies are already subsidized farming. Next year, raw milk from small and medium-sized ranches will The purchase volume will continue to decrease, and the price of raw milk is expected to fall below 3.8 yuan/kg.”
