China needs more milk
Date: 15 July 2014
China's need for more milk continues to help underpin strong global prices. While rising incomes are fuelling demand, China's domestic production fell more than 10% in 2013 according to a recent article from Hoards Dairyman, a popular USA dairy magazine.
While China's rampant foot and mouth has had a detrimental impact on production, the Chinese consumer has in fact played the biggest role in dropping milk production by slaughtering dairy cows for consumption.
In an effort to shore up its long-term milk production, China switched its subsidies from small to large farms but the cows did not move to the large farms as the government expected. Instead, they found their way to the dinner table as record beef prices encouraged small farmers to sell dairy cows for beef.
With a forecast milksolids payout of $7.00/kg for the 2014-15 season, the most costly thing New Zealand farmers can do is run out of feed.
"Even higher input farmers can get caught because they do a feed budget based on average pasture growth rates and then weather conditions mean the grass doesn't grow" says Ian Williams, Key Account Manager for Pioneer® brand products. "Carrying a buffer of feed allows farmers to stabilise production and profit".
Maize is the ideal option because it is a drought tolerant crop which produces reliable yields even under dry growing conditions, it is excellent for milkers as well as dry cows and it can be stored for several seasons until it is needed.
"Contract an extra tonnage or plant another paddock of maize silage" says Williams. "You don't need to feed it if you don't need it and it is relatively cheap insurance against potential feed shortages".