Dairy industry review 2020 and outlook for 2021
By: Date: 2021-03-31 Categories: chinesefood Tags: ,
   On March 25, the 8th meeting of the 6th Council of China Dairy Industry Association and the 2021 China Dairy Industry Economic Operation Conference was held in Nanjing.

   At the meeting, Song Kungang, President of the China Dairy Industry Association and Honorary Chairman of IDF China National Committee, made a report on”Dairy Products Industry 2020 Review and 2021 Outlook” .

  Song Kungang

   Due to the impact of the new crown epidemic in 2020, my country’s dairy industry has had an extraordinary year. The purchase of raw milk, the production of dairy products, and market sales have all been affected. Has different degrees of impact. However, with the care and support of the Party Central Committee, the State Council, and governments at all levels, and the joint efforts of all employees in the industry, not only have the adverse effects been minimized, but also good results have been achieved. In particular, the public has further enhanced their awareness of the importance of dairy products, activated the dairy product market, and promoted the consumption of dairy products. The epidemic has also promoted the rapid development of online sales. Convenient services have been welcomed by consumers and have also promoted consumption. In 2020, there are many new insights and understandings of the industry, which will lay the foundation for future development.

  1. The overall situation of the industry in 2020


  Production and operation situation

   In the first quarter of 2020, due to the need for national epidemic prevention and control, traffic in some places was not smooth, which caused difficulties in the purchase of raw milk and the sale of dairy products. In February, the national dairy product output fell by 17.45%month-on-year; in March, the dairy product output fell by 8.89%month-on-year, of which milk powder increased by 13.66%month-on-year.

   The Party Central Committee and the State Council have listed dairy products as necessities of life and provided strong support and protection. The entire industry earnestly fulfilled its social responsibilities, adopted effective measures, and carried out milk preservation.”Five guarantees” actions such as farming (not rejecting a drop of qualified milk), guaranteeing production, quality, price, and supply. The situation in the entire industry improved in the second quarter. The output of dairy products in April achieved positive growth; the output of dairy products in May increased by 10.46%year-on-year, and the cumulative year-on-year growth was -3.32%; the output of dairy products in June increased by 7.85%year-on-year, and the cumulative year-on-year growth was -2.51%.

   According to data from the National Bureau of Statistics (monthly report), from January to December 2020, there were 572 dairy companies above designated size (565 in the previous year), the main business The total business sales revenue was 419.56 billion yuan, a year-on-year increase of 6.22%(last year:10.17%); the total profit was 39.485 billion yuan, a year-on-year increase of 6.10%; the sales revenue margin was 9.41%(last year:9.61%); the year-end finished product inventory was 9.09 billion yuan It accounted for 2.17%of sales revenue (2.37%last year); the total loss of loss-making enterprises was 2.101 billion yuan, a decrease of 3.06%year-on-year; the ratio of industry losses to total profits was 1:18.79 (1:17.47 in the same period last year). This means that the economic efficiency of the entire industry is better than that of the previous year.

   From January to December 2020, the output of dairy products was 27,803,800 tons, a year-on-year increase of 2.84%(last year:5.58%). Among them:the output of liquid milk was 25,994,300 tons, a year-on-year increase of 3.28%(last year:5.81%); the output of milk powder was 1.0123 million tons, a year-on-year increase of -9.43%(last year:2.36%). The output of infant formula powder cannot be accurately estimated at present, but the decline is certain. If estimated by a 10%decline, the output of infant formula milk powder last year was about 650,000 tons.

   In 2020, in 31 provinces, autonomous regions and municipalities across the country, 16 provinces and autonomous regions will have positive growth in dairy production (26 last year), and 15 will have negative growth ( Last year it was 5). Key provinces and regions for dairy production:Hebei, Inner Mongolia, Shandong, Heilongjiang, Shaanxi, and Henan accounted for 49.15%of the country’s total output (49.54%last year). In the production of liquid milk, Hebei Province accounted for 13.4%, Inner Mongolia 12.3%, Shandong Province 7.9%, Henan Province 6.8%, Ningxia 5.5%, Heilongjiang 4.8%, and the six provinces accounted for 50.7%of the country’s milk powder production; Heilongjiang Province Accounted for 39.5%, Shaanxi Province 13.5%, Hebei Province 10.4%, Inner Mongolia accounted for 9.5%, Jiangsu Province accounted for 5.5%, and the five provinces accounted for 78.4%of the country.


  Import and export situation

  1, import. According to customs statistics, from January to December 2020, the country imported a total of 3,478,300 tons of various dairy products with a value of 12.599 billion US dollars, an increase of 11.07%and 6.22%respectively over the same period last year. The total value of imported dairy products is about 102.62 billion yuan, equivalent to 24.5%of the total sales revenue of the domestic dairy industry; equivalent to about 19.437 million tons of fresh milk, equivalent to 60%of the domestic fresh milk output. Among them, the import volume of liquid milk increased by 16.75%, milk powder increased by -3.50%, infant formula milk powder increased by -2.18%, whey powder increased by 38.07%, lactose increased by 22.70%, the largest increase, but I think it is the company’s raw material reserves the reason. The import status of various types of dairy products is as follows:
Dairy industry review 2020 and outlook for 2021image
  2, exit. According to customs statistics, from January to December 2020, the country’s dairy products exports totaled 46 thousand tons, with a value of 244 million U.S. dollars, a year-on-year increase of -19.90%and -46.81%. Among the export dairy products in 2020, infant formula milk powder has the largest decline, which is -61.37%; traditional export dairy products-condensed milk exports have fallen by -12.60%; casein (casein) exports have increased by 37.23%. The export quantities and prices of various varieties are as follows:
Dairy industry review 2020 and outlook for 2021image(1)< br/>

  Quality status

   From January to December 2020, the State Administration for Market Supervision organized a random inspection of food safety supervision. The pass rate of infant formula milk powder was 100%, and dairy products were excluded from a few products. Except for the unqualified, the good situation of all qualified products was basically maintained, and the product quality was excellent and stable. Only 1 case of unqualified dairy products was notified:the”pure goat milk” commissioned by a goat milk enterprise in Shaanxi had unqualified acidity (inspection result 16.1°T; standard 6-13°T).

   In the first three quarters of 2020, the national market supervision system food safety supervision sampling:9305 batches of infant formula milk powder, 14 batches of unqualified, 99.85%pass rate ; 54421 batches of dairy products, 83 batches of unqualified, 99.85%pass rate. This is the highest qualified rate among the 34 types of food sampled.

   The mainstream brand infant formula milk powder quality competition organized by the Association in 2020 has achieved proud results. A total of 34 brands participated, 66 testing indicators (including risky substance testing), a total of 11 random inspections, 374 batches of 1242 samples were tested, all of which were qualified, and some indicators with both upper and lower limits, the test results are all within the ideal range. The quality of the participating products was excellent and stable and won the honor of”Quality Gold Award”. They are:Congerzhuang, Baiyue, Yipin, Ounida, Dumex, Meikegote, Meilu, Simmel, New Baytz, Daqing Amerlot, Ausnutria, Beinmei, Corolla, Biostime, DUTCH LADY, Junlebao, Meiliyuan, Aiyousu, Meiyiyuan, Human Chu, Mingyi, Liaoyuan, Meiling, Duojiado Dairy, Beitjia, Yili, Mengniu, Shengyuan, Sanyuan Foods, Yashili, Bright Dairy, Feihe, Wandashan, Yinqiao.

  II. Outlook for 2021< /div>

   Meat, egg, milk is a necessity for a well-off life, and an indispensable food for a healthy and strong nation in China. This has formed a consensus in all sectors of society. In particular, the new crown epidemic has deepened people’s understanding of the health effects of dairy products. I believe this year’s dairy market will show a vigorous trend, and consumption will increase rapidly. We must prepare for the arrival of a good situation. Here are some suggestions on the key tasks of the company this year:


   unswervingly develop its own milk source

   To develop dairy production, raw materials are the foundation. In recent years, the growth of milk sources in my country has been weak, and the contradiction of regional imbalance has become more prominent. The shortage of milk sources has become the main reason restricting the development of the industry. The development of milk sources depends on us. It is recommended that all enterprises take the construction of milk source bases and the development of their own milk sources as their top priorities, and increase the self-sufficiency rate of raw milk as soon as possible. Under the current shortage of cattle sources, measures can be taken to import from abroad. It is understood that this year, representatives of the two sessions have proposed to the country to relax the country of origin of dairy cows and expand dairy breeds.


   stabilizes milk prices

   Milk prices have been rising steadily in recent years, which has become one of the main factors restricting the development of my country’s dairy industry. In December 2020, the average milk price in 10 provinces and cities was 4.15 yuan/kg, a 16%increase over 2018. In some places in the south, it even exceeded 5 yuan. This price is twice that of countries with a good dairy industry. For example, in October 2020, the price in the United States is 2.56 yuan/Kg, in Europe it is 2.58 yuan/Kg, and in Oceania is 2.21 yuan/Kg. High prices have reduced the market competitiveness of domestic dairy products, some varieties have had to stop production, and cheese production, which has been advocating for several years, is progressing slowly. To curb the steadily rising milk price, in addition to developing its own milk source, it is necessary to maintain the purchase order, collect milk strictly in accordance with the contract, strictly control the quality, and never raise prices to rush to purchase, and ensure the quality of milk collected. Enterprises should earnestly implement the purchase guide prices set by the relevant local authorities. Where there is no guide price, they should advise the relevant local authorities to issue a guide price, and abolish the old rule that prices are determined by the relationship between supply and demand.


  Optimize product structure

  Due to changes in consumption habits and market supply and demand, the product structure of dairy products must be optimized as soon as possible. 1. A base-based enterprise with milk powder as its mainstay should develop liquid milk production in light of local conditions. 2. Companies that focus on infant formula milk powder should shift their focus to adult milk powder, such as breast milk powder for pregnant women and milk powder for the elderly. The number of newborn births in my country is decreasing year by year. In 2017, it was 17.23 million, and in 2020 it was 10.35 million (the number of registrations by the public security department at the end of December), a decrease of 41.8%in three years. 3. Develop deep-processed products, especially milk powder production enterprises, using ultrafiltration technology to produce whey products, such as:whole milk protein powder, whey powder, lactose, whey protein powder, etc.


   guide consumption and expand the market

   Promoting dairy products and guiding consumption is a long-term work that the industry and every company must do earnestly, and publicity must be integrated into all work of the company , Especially large-scale backbone enterprises should set an example. Suggestions:1. The advertising of various companies can promote their own good, but do not insinuate or belittle other brands and other products; 2. Brand and product advertising should increase the content of public welfare publicity; 3. This year’s”Dairy Nutrition Week””All enterprises should use various media and occasions to carry out various forms of propaganda based on facts.


   Fight against phenomena that harm the interests of the industry and the interests of enterprises

   In May 2020, Guangzhou Yuexiu and Hunan Yongxing had an illegal incident that deceived and misled consumers by pretending to be “solid drink” as “special medical infant powder” , Has caused serious consequences. Although the parties have been punished due to the punishment, they have caused reputational damage to infant formula milk powder and infant formula foods for special medical purposes, and also harmed the overall interests of the industry. There were also many incidents that damaged the reputation of the industry last year:creating rumors, fabricating charges, maliciously attacking companies; violating scientific knowledge, discrediting corporate products, and harming product reputation; misinterpreting dairy products, corrupting product reputation and affecting market sales; will not contain dairy products Foods and beverages of”××milk (milk)”, fish eyes mixed with beads and so on. The entire industry must unite and fight against these phenomena that damage the interests of the industry.

   When companies encounter similar problems, they must fight in accordance with the law and social consensus, and the association supports you. For those who violate the law, we must obtain the support and help of law enforcement agencies and bring them to justice; for those who violate social axioms and science, we must organize experts and scientists to give positive clarifications; for maliciously discredited and attacked illegal cyber navy forces, we must Report to the competent authority in a timely manner, delete the information, cancel its official account, and pursue its legal responsibility.

   Employees in the whole industry must unite to create a harmonious, fair and just development environment, and strive for a better first year of the”14th Five-Year Plan” Performance. Thank you!

  March 25, 2021