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China’s Dairy Farm Business Struggles to Survive

Guangming Daily carried an article on the financial crisis that the dairy farms in China face. The article stated that, as more and more Chinese dairy manufacturers expand their dairy production overseas, an increasing number of domestic dairy farmers face challenges to survive. They have to deal with a reduced sales price and a lack of demand. According to the article, mid-size dairy farms were affected in 2014 and will eventually have to close their businesses while, since 2015, large sized farms have started to see their production volume fall. As a result, the farmers have had to kill the excess cows that they do not need. The article reported that the crisis is also affecting the milk processing industry where currently one-third of milk powder manufacturers remain idle because, due to low demand since 2015, they have been building up their milk powder inventory. Some of them have had to sell their milk powder to pig farms that would then feed the powder to pigs. According to the article, "If the government does not intervene to assist the dairy industry, it will be more and more difficult for the dairy industry to survive the crisis on their own." 

Source: Guangming Daily, August 12, 2016