Sino-Dutch Dairy Development Centre

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2015-PPS2 Farm size development in China

2018-8-14 17:19:49 Comments:0 Views:396 category:Project Introduction

8.1. About Principle Investigator

Some of his activities:

Advisor Dutch Sustainable Dairy Chain. The Dutch Dairy Association (Nederlandse Zuivel Organisatie, NZO) and the Dutch Federation of Agriculture and Horticulture (LTO Nederland) have joined together in the Sustainable Dairy Chain. In this partnership the dairy processors involved work together to see to it that the Dutch dairy sector becomes the global leader in sustainability. For this reason, the Sustainable Dairy Chain has formulated a number of goals which are related to climate and energy, animal health and welfare, grazing and biodiversity and the environment. (2011 -  ).

Global Dairy Farmers: network of dairy farmers from all over the world and representatives from the supplying industry.  GDF organizes a conferences and study trips for its members and produces a bi-monthly newsletter with current developments in the dairy sector worldwide. Member of the management team of GDF. GDF has organized trips to e.g. Australia, China, Europe, Russia, Argentina, Vietnam/Thailand.

8.2 Objectives of the study

Starting point of study was the assessment of the status quo in performance (economics, sustainability) of the different Chinese dairy farming systems. In the next step specific issues, like differences in management, use of technology to improve productivity, risks and a sustainable development within a ‘from grass to glass’ chain approach will be taken into account, resulting in a desired farm development in Chinese dairy. The first step was to conduct the study based on Dutch data. In the second step a survey with the help of Dr Junfei Bai and Liu Kai was conducted in China and an analyse was made based on Chines data.

The overall goal of the analyse was 

-         to get insight in performance of different farm types using performance indicators that fit with regional circumstances and, as a set of indicators, give an integrated picture of the overall performance.

-         to get insight in differences in performance within farm types, to get insight in room for improvement

8.3 Main report of the research

For the overall picture of performance of a dairy farm indicators are required for:

-         People (e.g. labour circumstances, safety, milk quality, use of antibiotics, animal welfare)

-         Planet (e.g. losses of N and P, greenhouse gas emissions)

-         Profit (e.g. productivity, gross margin, total costs)

The choice of indicators for this analyse was based on critical factors for Chinese dairy production, partly based on the white paper and the availability of data.

A survey was developed in cooperation with Dr Junfei Bai (CAU) and was conducted by CAU and SDDDC. The survey was an integral survey with collection of data on farm structure (herd, land, machinery, staff), farm management (feeding, manure, use of software), economics (loans/debts, gross margin) and performance (productivity, environment)

The survey was conducted in July – October 2015 by graduate students from College of Economics & Management (CEM), coordinated by Junfei Bai (CAU) and Liu Kai (SDDDC). The survey was conducted in the provinces Hebei, Tianjin and Beijing. The total sample of farms was 126. The first analysis was done by Shixian Zhai and Junfei BAI (both CAU), presented on December 7th 2015 at CAU.  The dataset was further analysed by Wageningen UR by Co Daatselaar and Alfons Beldman, using the same farm size classes as in the analyse of the Chinese counterparts.

For most graphs and tables data of 90-100 farms could be used; only for feed costs and margin it was around 55.

The final performance indicators that were used in this study were:

-         Milk quality (SCC, TBC, milk refusal)

-         Milk yield/cow, cows/labor unit

-         Milk price, feed cost, milk-feed margin, labour costs

The data was analysed and presented in 5 size classes of dairy farmers, showing the average (mark) result of the size class and de differences within the size class with boxes (25-75%) and whiskers (2.5 – 97.5%) as shown in the graph below.

The full report with all the graphs and the conclusions for each topic can be found in the appendix.

Within the survey also some data was collected on plans for investment and need and availability for loansBanks are main lenders, but also considerable number of other sources available

8.4 Conclusion

Summary of the main results

The majority of surveyed dairy farms had 300-1000 dairy cattle. On average the milk yield per cow was somewhat higher on larger farms.

Milk quality: Regarding milk quality there were found more negative outliers within the group of smallest farms. There were was not much difference between other groups. Also this survey shows that milk quality is a major issue:  Nearly every farm has one or more refusals of milk. The main reasons for this are sensory evaluation, SCC and TBC. SCC and TBC are quite often above the international thresholds

Milk price: the average milk was prices nearly 4 RMB/kg (€0.50-€0.55; $0.60-$0.65). About 4.5 RMB/kg milk considered as appropriate (to cover the calculated costs). Larger farms have a higher milk price, but also somewhat higher feed costs.

Margin: The ratio milk price /feed costs is about 1.5, feed are clearly the major costs. This means that the margin is heavily influenced by variation in feed costs and cannot be controlled by the management.  To compare the ratio milk/feed costs in the Netherlands is about 3.5.  The margin is lower in the group of smallest farms, we did not find much difference between the other groups. In the data we found a tendency of less labour/kg milk on bigger farms. For other costs we did not see major differences between the different size classes. The calculated margin is rather low and does not include all costs. Taking into account the volatility of feed costs this means the systems are quite vulnerable. The survey also showed that quite a number of farms need loans for daily expenses. The top 3 of main problems to be solved according to the farmers were:

-         Low milk price

-         Independent test of milk quality

-         Downturn of consumer market

Important conclusion is that the differences within farm types are big for almost all indicators, this suggest there is room for improvement on many farms and farm types.

Main overall conclusions

-         The survey showed some differences between farm types: the group with smallest farms tends to have more outliers with milk quality, a lower milk price and lower margins. Differences between other groups rather small.

-         The differences within groups are much bigger than the differences between groups. This shows that there is room for improvement.

-         All farm types are vulnerable for volatile feed costs: feed costs are a high percentage of total costs and margins are relatively low.

-         A large share of the farmers with smallest and largest scale farms expect that they cannot get the required/desired loans.

-         With some additions this survey could give a balanced picture of the overall integral (triple P) performance of the different farm types. For the Chinese circumstances total costs, N and P efficiency and longevity should probably be added.

-         The large differences within farm types show that there is room for improvement for many farms. Tools to achieve this improvement are:

o   Use of bench mark tools to compare results of a specific farm with a peer group of farms with a similar farm structure;

o   Exchange of best practices between farms e.g. by e-tools or in discussion groups;

o   Suggestion is to use results of this survey to discuss in a workshop with e.g. dairy economists and/or farm managers if and how this type of information could be used.

-         In order to assess integral performance (triple P) of different types of dairy farms a structured and continuous data collection is needed:

o   Stratified sample of farms spread over different regions;

o   Choice of right triple P indicators and aligned integral data collection;

o   Continuous data collection (yearly of bi yearly) to be able to analyse trends.

8.5 Appendix

Farm Development Report: Differences between and within dairy farming systems




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