What will be the requirements and issues regarding nutrition, feed (fibres) and genetics?
Production or availability of good quality fibre is now and is likely to remain a key problem in the nutrition of highly productive livestock. Imported dairy genetics are mostly from countries using grass or grass silage of a good quality and this is unlikely to be available. Even forage maize growing is limited, which has encouraged increasing imports of alfalfa or oat hay from the US and Australia. In the future there will be a growing need to focus more on the forage element of the diet and also make better use of co-products from the food and drinks industries. There is potentially a good opportunity to advance cost effective technologies with enzymes or alternative treatments to improve the digestibility of the coarse fibre in corn stalks and cobs, also in bagasse in sugar cane producing areas.
We all know there are serious animal health issues in China, for example foot and mouth disease (FMD). Seems to me like a big danger for the growing number of large scale farms. How can we protect these big investments? Given the stance of the Chinese government, had the disease policy also changed in order to protect the sector and if so, what's being done to eradicate FMD?
I would have to say that I am not an expert at all in the animal health policy in China. The current status is not one of eradication but of containment – hence the vaccination policy. Many larger farms do have effective biosecurity measures already in place to safeguard against incoming infection and this will become standard in due course but naturally there cannot be 100% protection.
If I summarise your vision, key dynamics are that expanding dairy business need...
Yes – is an ongoing problem which either directly slows growth or puts pressure on suppliers. More commonly larger businesses seek outside private or public investment within China or Hong Kong.
2. Effluent management?
The larger units need to invest in effluent treatment plants – these can create energy but are a significant cost.
3. Quality feed ingredients and fibres?
Yes, especially fibrous products – they seek supplies of quality fibre from imported products such as alfalfa and try to grow themselves or get contract grown forage maize or local alfalfa (typically of lower quality) – the local Chinese provinces are encouraging the latter.
4. Improved (genetic) stock?
Just stock and import price issue.
Combined, is quite a constraint in my eyes. How will they deal with these factors?
Yes there are constraints but current margins on milk and the outlook on growth is stimulating businesses to make these investments. But it would be a mistake to believe that China is a cheap place to produce milk.