China’s dairy herd has shrunk by two million cows in the past year.
There has been a mass exodus of small dairy farmers due to high production costs and record beef prices.
Dairy Australia industry analyst John Droppert says China has killed more cows this year than the entire Australian dairy herd.
«Basically it means production in the country is in a hole, in short,» he said.
«But you are certainly seeing a reduction in production, I think they are talking 10-15 per cent this year.
«Effectively that means at the broader level they have a bigger gap.
«Demand is growing and at the same time supply is shrinking.»
Australian dairy farmers face a tough fight on international markets to gain extra business from the Chinese dairy shortfall.
Mr Droppert says the USA and New Zealand are both ramping up exports to the country.
«Their (New Zealand) September export stats came out and 40 per cent of their product for that month went to China.»
However it could be good news for exports of live Australian dairy heifers.
That market is still competitive with international competition for that business from both Uruguay and New Zealand.
«It says good things for those people that export heifers to China.
«At some point in the future either cost of milk production there will come down or someone is going to mount a drive to increase local self sufficiency.»
Source: ABC
