New Zealand’s Fonterra dairy is in negotiations to lease land in China by mid-year. The land would be used for two New Zealand-style dairy farms in the world’s largest emerging dairy market.
Fonterra China managing director Philip Turner said with the firm’s pilot farm in Hangu, in Hebei province, performing profitably ahead of schedule and producing record levels of milk, the time was right for further investment.
The China dairy market is forecast to show double-digit annual growth over the next 10 years. The domestic dairy industry was developing quickly but the current supply of high-quality fresh milk could not keep up with demand, Mr Turner said from Beijing.
Milk safety in China is of high public concern after deliberate melamine poisoning of milk supplies two years ago caused the deaths of several babies and made thousands of infants ill with kidney problems. The melamine was added to raw milk supplies to processing factories to artificially increase protein levels, thereby drawing a higher price.
Fonterra’s joint processing venture SanLu was involved in the crisis, along with more than 20 other plants. SanLu was bankrupted and Fonterra is no longer involved in processing in China but is expected to announce a new venture soon.
The planned new farms would be of a similar size and carry around 3300 milking cows.
They would be a mix of cows imported from New Zealand and those raised on Fonterra’s pilot farm, Mr Turner said. Tangshan Fonterra Farm is producing its second generation of China-born heifers. Half of the herd has been raised from the original imported friesian herd.
Source: stuff.co.nz