Economic woes sour prospects for China’s dairy farmers

Farmer Liu Bingyong used to make a tidy profit selling milk but is now leaking cash — hit by a dairy sector crisis that embodies several of China’s economic woes. Milk is not a traditional mainstay of Chinese diets, but the Chinese government has long pushed people to drink more, citing its health benefits. The country has expanded its dairy production capacity and imported vast numbers of cattle in recent years as Beijing pursues food self-sufficiency. However, chronically low consumption has left the market sloshing with unwanted milk — driving down prices and pushing farmers to the brink — while a baby bust threatens to cloud its future prospects. “The current state of China’s dairy industry has been long in the making,” said Liu, a veteran farmer in the eastern province of Shandong. “We always knew things were going to get worse if the industry didn’t adjust,” he said. A few years ago, Liu typically skimmed a profit of about 5,000 yuan (US$697) per day from his yield. However, ...