Investigation and analysis of Heilongjiang dairy farming development

    Heilongjiang is China's important dairy area, dairy farming is the sign of the provincial animal husbandry and agriculture industry. Heilongjiang provincial party committee, and the provincial government have always attached great importance to supporting the development of the dairy industry.

    In 2012, the province subsidized 100 million yuan on dairy production performance measurement, TMR machinery purchase, silage purchase, loan discount for scale cultivation, fresh milk quality security monitoring, raw milk dairy industry information platform construction, and the third party testing. Animal husbandry and veterinary departments also actively have taken effective measures, such as promote improved varieties to level up the production of dairy cattle; Vigorously develop standardized scale farming to improve the management level of breeding cows; Establish scientific pricing mechanism, regularly issue trading reference price for fresh meat and milk; Establish a fresh milk trade fair balance, a solid third-party testing work; complete the fresh milk quality security monitoring work, improve the quality and safety of fresh milk, etc. By the end of 2012, the amount of cows in Heilongjiang was up to 2.696 million, with 8.57 million tons of fresh milk production, the average unit yield of cow was 5.5 tons; The provincial output value of fresh milk production achieved up to 24 billion yuan, farmers net income reached 4.8 billion yuan, average of farmers net income was increased by 282 yuan. At the same time, Heilongjiang's scale, standardized cultivation of dairy cows got rapidly advanced. In 2012, the proportion of heilongjiang province scale cultivation reached 47%, increased by 13% than 2007, 2% increasing per year; 37 dairy counties having more than 10 thousand cows, 1086 farms having more than 300 heads of cattle, 640000 living cows, accounting for 23.7% of the total amount. However, heilongjiang dairy farming is also facing some problems to be solved, such as backward development mode of dairy industry, low level of cow raising the management, low efficiency of breeding, low degree of farmers organization and integration of industry, fresh milk quality problems, and others problems remain to be improved.

 In order to further understand the situation of heilongjiang dairy farming

    In order to further understand the situation of heilongjiang dairy farming, November 4 to 9, 2012, the journalists of "Chinese dairy industry" held an experience exchanges seminar with pastures owning above 1000 cows in Heilongjiang; After the meeting, 2 groups visited Harbin(including Shuangcheng), Qiqihaer (including Kedong, Fuyu and Angangxi), Daqing (Duerbote), Suihua (Anda, Zhaodong), carrying on on-the-spot investigation. Research groups have talked with managers from more than 100 dairy farms, carried on investigation and in-depth interviewd in 11 scale dairy farms,10 breeding village, and 14 retail owners of cows. Research results show that the overall performance of Heilongjiang dairy industry development is stable, there is a downturn in the cows living, the fresh milk purchase price increases slightly, dairy farming scale process is fully pushed. In the stable overall environment of dairy industry development, Heilongjiang dairy industry development face some new situations, which will be listed below.

    The first situation is that dairy costs continue to rise, and the prices rise slightly, breeding profit margins get squeezed, there exists a downward trend of living cows, many cows are butchered as beef cattle.

    In recent years, the dairy costs continue to rise, and the pace of rise in 2012 continues. The dairy feed costs and personnel costs are increasing rapidly, according to the questionnaire, in spite of rising costs, price of milk is basically stable , increased only by 0.5 yuan from 2011 , milk price is about 3.80 to 4.00 yuan/kg. Some experienced cattle breeders said that, calculated by the actual milk production cost and sale price, cows producing less than 5 tons of milk should be eliminated, otherwise they will lose money. At the meanwhile, beef prices are rapidly rising, raw beef price is ranging from 12 to 20 yuan/kg, a lot of cows are butchered as beef cattle, and living cows has an obvious downward trend. Despite the decline of living cows, dairy enterprises still have enough milk, on the one hand thanks to cows unit yield improvement in our country, on the other hand the import milk powder is replacing the domestic milk powder, resulting in a decline of demand for domestic raw milk. In 2012 the number of imported milk powder is still growing.

    Secondly, under the influence of narrow space of profit margin, most ranches cannot maintain the scale, abnormal elimination of cattle is growing. However, the large dairy companies are speeding up the pace to build large scale farms.

    Heilongjiang has vast land, rich resource of corn, soybean and meal at low price, so although the production costs rise fast, most experienced cattlemen can keep the balance of profit and loss, with a slight surplus. However, many scale dairy farms start to reduce back-up cattle, knocking out cows of low production, generally the cows producing less than 5 tons of milk will soon be eliminated. Although days for scale ranches are tough, large dairy companies are accelerating on construction self-built scale ranch. Erie and Mengniu have respectively built a ranch of ten thousand cows in Harbin, putting on operation in 2012. In addition, Erie group plans to build another ranch of ten thousand cows in Heilongjiang in 2012.

    The third point is that, the number of breeding community is increasing, household breeding is extending scale, and the mechanization is improving.

    The survey shows, from 2011 to 2012 there are more and more large scale breeding communities in Heilongjiang. Generally speaking, the common management model of these breeding communities is: unified construction, unified feed, unified breeding, unified epidemic prevention, unified mechanical milking, and unified milk sales. Cow house is designed and constructed unified, and all the charge is solved by farmers themselves or loans. Farmers pay rent to the farming community, farming village collect rent, and the income comes mainly from the difference between the acquisitions and sales of raw milk.  Raw feed comes mostly from the local purchase, and processing and storage of roughage are provided by the cooperative mechanical and silo, some breeding villages have organized unified silage corn farming, and unified storage; Fine feed comes basically from the purchase of premix concentrated feed, farmers are only engaged in dairy cattle feeding and management work.

    In addition, Heilongjiang dairy farming area also showed some welcoming changes :

    (1) The scale of breeding village is expanding gradually. The total amount of cows in a breeding village is about 300 to 500, even up to 1000 capita. The average amount of cows for each household is about 20 to 40, some large ones can reach more than 100 capita, meeting the requirements of scale breeding standard.

    (2) The mechanization level of breeding village is gradually increasing. Besides realizing mechanized milking, some villages have begun using TMR equipment. For instant, Taikang dairy plant in Dorbod Mongol autonomous county has two TMR equipments, supplying TMR feed for farmers, playing an important role for improving the level of feeding, the quality of milk and fresh milk, and saving labor cost.

    (3) Divers management modes. In previous breeding communities, farmers rent barn to breed cows by themselves, farmers and animal lived together. The research showed that the management mode of dairy farming community in Heilongjiang has new change: for small scale dairy farmers (only a few cows), the cows are generally bred by the village cooperatives, so as to realize the separation of people and animals; For larger scale dairy farmers (more than 100), the feeding and management are done by themselves, the village provides free shelter and milking, and only collects the price difference of fresh milk.

    Thus it can be seen that part of the dairy breeding communities in Heilongjiang have begun to gradually make people change their thinking neighborhood is simply "concentrated cage-free", the production scale of dairy householders has expanded, and the overall level of management and mechanization is also improved.

    Fourthly, in the process of retail investors entering the community(village), government's support and milk enterprises' guide have played an important role

    In the construction of dairy farming community, the government plays an important role to support and push. Dorbod Mongol autonomous county built 17 dairy breeding communities of more than 500 cows in 2011, and plans to increase this number to 27 in 2012. The establishment of 44 farming communities will lead more than 22000 cage-free farmers to realize unified construction, unified management, unified hybrid, unified epidemic prevention, and unified mechanical milking.

    At the same time, dairy companies' guide cannot be ignored. Shuangcheng is the place where Nestle's milk base is located, in order to improve the quality of the acquisition of raw milk and ensure the safety of the raw milk, Nestle introduced a rating system, and led the retail cattle breeders entering breeding community by this means, we call it "new Nestle model". 

According to the field or district of the traditional farming scale, standard of rate for Nestle is like, mechanical milking or not, using TMR or not, having waste treatment equipment or not, and so on. These performances will be divided into A, B, C, D four grades, different levels for different milk collection base price, and the difference of each level of the milk price is big: the lowest grade A milk collection price is 3.10 yuan/kg, B level is 3.65 yuan/kg, C level is 3.80 yuan/kg, and D level is 4.00 yuan/kg. Rating monthly, Nestle sends personnel to do the pasture and community investigation, once found a fraud, they will never accept the ranch for raw milk. So under the guidance of "new Nestle model", many large free-range households entered the farming community in order to raise their revenue; Many dairy farmers began promoting mechanical milking and TMR, in order to improve their milk level,  and some powerful scale dairy farms have also constructed new waste treatment equipment.

    Number five is that the number of retail cattle breeders fell rapidly, the small scale (fewer than 10) has quit, medium-sized scale (10 ~ 30) is quitting, and big scale cattle breeders (30 ~ 50) are entering the community

    The main raisons for the drawback of retail dairy farmers are: (1) Feeding costs rise, but prices don't, so the benefit is little; (2) The income of working outside the village grows, daily wage is 120 to 140 yuan, the mechanic can achieve 240 yuan or above; (3) The price of beef cattle is increasing, which attracts retail dairy farmers to eliminate cows; (4) The income of farming or other livestock and poultry breeding increases compared to cows breeding; (5) The price of raw milk increases if entering the community or cooperatives.

    Fuyu is a dairy county where cage-free is the main mode of breeding cows, the peak of cows total has once reached 150000, and the actual cows on hand is around 100000 capita. In Fuxin village where every family raised cows before, now we can't find many cow breeders. A farmer from this village told us that, feed price was too high, for example, in 2011, one bean cake cost 1.70 ~ 1.80 yuan/kg, but now this price was up to 2.30 ~ 2.40 yuan/kg; Before, they could earned  3000 yuan per cow a year deducting the forage money, sometimes 4000 yuan, but now the benefit was less than 1000 yuan. Besides cows, she raised also some sheep, the income for that was 20000 to 30000 yuan per year. In addition, a dairy cow could be sold at most 10000 yuan, or at least 6000 yuan. So this dairy farmer summarized that: raising beef cattle was better than dairy cow, raising sheep is better than beef cattle. And the local animal husbandry management department director also joked: you'd better raise 10 chickens than 1 cow. Therefore, this dairy farmer reduced her breeding cows, from 17 cows in 2011 to just 10 in 2012. Two milk stations in this village (one individual stations, and one enterprise self-built milk station), could gather milk 2.4 tons per day in 2011, and now less than 1 ton, it's another reflection of cows reduction.

    Shuangcheng was a dairy city, once every family had cows, but now if walking into the villages, it's difficult to see a householder with cattle in the yard. Shuangcheng Yonghe village had more than 1500 cows before, but now only 600, including more than 400 in the community, only about 10 households still breed cows and milk at home, sending to the milk station after collecting all the milk, the average amount of cows in each household is around 20 to 30. Zhou Weimin, villager of Shuangcheng Yonghe village, aged 48, having more than 40 cows, he is one of the largest cow breeder. According to what he said, the price of milk they send to the milk station is 3.10 yuan/kg, deducting the money for concentrated feed and corn, there is nearly nothing left. The ones who are still breeding cows are some old men between 40 and 50 years old, without competence to work outside, they can do nothing but stay home raising cows. When it came to whether to expand the dairy farm in 2013, he said no, he would sell everything while cattle was still valuable. About entering the community, his will is not strong, he said there existed limits for community, they only let in milking cows, not back-up cows, thus made trouble for him on management, so he had no plans to enter the community. Meanwhile, in some areas where are well developed, entering the community is the best choice for large scale cows breeders. In Caorui Community breeding area there exist six farmers, the average scale is 50 to 60 cows, the head of community has 100 cows. Because the space is enough, all cattle can live in (including milking cows and back-up cows), although every farmer feeds his own cows in the community, all cows get concentrated feed supply, unified silage supply, unified mechanical milking, and unified disease control and prevention. Current milk price in the community is 3.20 yuan/kg, 0.10 yuan/kg higher than the price of milk station, besides, the community doesn't charge management fees or rent.

    The six point, in some places, the cooperative mode becomes an effective way for the transformation from  cage-free to scale breeding.

    Our survey found that in the process of transformation from cage-free to mass breeding in Heilongjiang, besides taking cows into the community, creating dairy cooperatives became another way. According to the property right relations during the entrance of cows into community, cooperatives are divided into two types.

    The first type is that, the cow property still belongs to the dairy farmers, the cooperative shall be responsible for the unified management and feeding, dairy farmers profit by selling fresh milk. Let's take Anda county Youyi dairy cooperative. Founded in October 2010, Youyi dairy cooperatives signed contracts with the villagers who have the will to enter community. Every cow entering the community for the first time got 500 yuan as bonus( not any more after 2013). After that, cows of different stages are paid in different ways: for a milking cow, the price of raw fresh milk is3.45 yuan per kg, excluding artificial, forage, disease, drug cost, the rest will be given back to the members of community; Small calves are sold by the cooperative after birth, and the money immediately returns to the members, the current price is 500 to 600 yuan/capita; For a small female calf, members willing to keep it can pay the cooperative as raising cost and management fee, and if won't , the market price is 800 to 1000 yuan; The eliminating cattle are sold by the members themselves.

    The second type is, the property right of cows belongs to the cooperative, and the cooperative shall be responsible for the unified management and feeding, dairy farmers benefit from the dividend revenue returned by cooperative. Here's an example of "iron cow policy" from Durbat mongol nationality autonomous county cooperatives. The details: Fro retail dairy farmers (including big ones), by the standard of the market price of 10000 to 12000 yuan per cow, the ranche signs a contract of 3 to 5 years with dairy farmers, the latter will receive a fixed income  of 2000 to 3000 yuan a year, and within the contract period, the cows in any condition have nothing to do with the farmers; After the contract, the ranch should return the same structure (i.e., the same production performance) of cows or money with agreed price, which way is determined by the farmers; During the period of the contract, the calves of cows belong to the ranch.
    And the seventh point is that, in the current situation, for the level of management and benefit,  large scale ranch is better than community,  community is better than retail dairy farms.
    (1) production per cow and the quality of raw milk

In large-scale ranches, the average unit yield is 30 kg/day, and the amount of somatic cell in milk is controlled below 200000 / ml, the total number of bacteria is under 50000 CFU/ml, milk protein rate is more than 3.3%, and butterfat rate is more than 4.0%; And in cage-free dairy farms, the average unit yield is 18 kg/day, butterfat rate and milk protein rate are respectively 3.34% and 2.80% to 2.95%. The unit yield for breeding community is 20 kg/day. 

    (2) costs for disease prevention and control 

In large-scale ranches, the disease prevention and treatment costs an average of 150 to 200 yuan/capita, while medical treatment costs different every year for retail dairy farmers, and they even barely pay for disease prevention. Common diseases for cows, such as metabolic disease and reproductive disease, the incidence rate declines gradually. And in large-scale dairy farms, the disease prevention costs not much, thanks to the improving of breeding management, feeding environment, the quality of veterinary, and the popularity of TMR equipment. However, lacking of the system of disease prevention for cows and the consciousness of using advanced technology to prevent disease, it's difficult for retail dairy farmers to control the health of their cows.

    (3) economic benefits

The economic benefits of large-scale ranch are obviously better than farming community and retail dairy farms. First of all, the unit yield of large-scale ranch is higher than breeding community and retail dairy farms, the annual unit yield is repectively 6 tons/capita, 5.5 tons/capita, and 5 tons/capita; Secondly, the price goes the same trend with the unit yield as 3.60 yuan/kg, 3.30 yuan/kg, and 2.94 yuan/kg for respectively large-scale ranch, breeding community and retail dairy farms.

    (4) policy and subsidies

Large-scale ranches have much more opportunities than retail dairy farms for the subsidies from province and the state, such as subsidies for improved variety of cows, machine purchase subsidy, cows insurance, and subsidies for the construction of standard farms and favorable breeding credit.

   (5) expansion financing
Under normal circumstances, the economic benefits of dairy farms is in proportion to the size of the ranch. So some scale farms and breeding community in Heilongjiang are planning to extend their dairy farms or construct another one. With larger scale and more fixed assets, it's easier for large scale dairy farms to have access to the bank loans and the financial support from dairy groups. And that makes the extension for large scale ranches much easier than the breeding communities, leading to a higher level of breeding management and benefit for large scale dairy farms.