Dairy: No Worries Down Under, Opportunities in China

March 9, 2010 06:00 PM

by Rick Lundquist, Ph.D.

As a participant in the Australian Dairy Conference last week, I became immersed in the Aussie dairy industry and culture.

While I told a tale of depleted equity and continued uncertainty in the U.S. industry, the Aussies seemed to have a more "no worries” attitude about the future of the dairy world, despite a 10-year drought in their country and wobbly prices this past year. They see 2009 as a "dag on a sheep's tail”; in other words, something to scrape off and move on. 
We heard from the Chinese, who are looking nowhere but up for dairy consumption in China. There's a famous old Chinese saying, we were told, that goes, "The masses regard food as their heaven.”

Dairy consumption in China is increasing despite the melamine scandal. They are looking for high-quality milk and dairy products from foreign countries. They are also rapidly building their own industry. They need technology, and they also need heifers from other countries. I stated in my last column that U.S. agriculture is becoming dependent on China, but there are opportunities there too, if we take advantage of them.
We also heard from Australian dairy producers. Theirs are primarily grazing operations. Some are feeding partial mixed rations (PMRs) to supplement the grass. Only a few are feeding TMRs in confinement. They know how to raise high-quality grass in Australia; sometimes too good. Subacute rumen acidosis (SARA) caused by high quality grass is a problem. They don't feed as much silage as we do, but I saw the best preserved silage I've ever seen in Oz: corn silage treated with L. buchneri inoculant, covered with Silostop film and shade cloth. It had absolutely no spoilage layer on top.
One thing I came back with is an appreciation for the dairy industry as a whole. For the most part, dairy farmers, regardless of where they're from, do this because they love cows and they love what they do. Whether they're from Australia or the U.S., they just want a decent return on their investment so they can continue to do what they love.
The world still looks to the U.S. dairy industry for technological advances and solutions to problems. The Chinese milk price is 50% higher than ours, but they still are unprofitable. We can compete with anyone in the world, due to our feed growing capabilities, technology and management. The world is continuing to get smaller, but this may be a good sign for our dairy industry.   
Rick Lundquist is an independent nutrition and management consultant based in Duluth, Minn. Contact him at siestadog@aol.com.

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