The multi-billion-dollar Chinese dairy market is ripe for the picking.
So says Jen Pino-Gallagher, head of international trade development efforts at the state Department of Agriculture, Trade and Consumer Protection. This week she’s leading a delegation of Wisconsin businesses to the Chinese city of Harbin, which is hosting the China World Dairy Expo and Summit. Officials from UW-River Falls will also attend to promote the school’s dairy training programs.
In an interview before the trip, Pino-Gallagher said the province of Heilong Jiang, where Harbin is located, is in an agricultural region similar to the upper Midwest with a large amount of land devoted to corn, soybeans and cattle production. It is also the most productive milk-producing province in China. She said the Heilong Jian government is putting “special emphasis” on building up its dairy industry. At least 10 Wisconsin companies will be exhibiting at the Expo, she said. In addition, they will be meeting with potential clients.
Wisconsin already has its foot in the door in Heilong Jiang because it is been a sister state to the province for 33 years. Moreover, the Badger State sells products such as bovine genetics, equipment and animal feed to Chinese dairies with sales worth hundreds of millions of dollars annually.
But the potential market is relatively untapped, she noted, and with a population of 1.2 billion people, the payoff could be huge for Wisconsin companies. Last year, she said, Wisconsin exported roughly $55 million worth of whey to China for use in everything from baby formula to processed food to mixes, dough and protein drinks.
Though the Chinese don’t have a tradition of drinking milk or eating cheese, she said that has begun to change in the last decade. In recent years, she added, the national government has started urging its people to drink at least one glass of milk a day, in part to add protein and nutrition to their diets. When she flew back from China in January from a trip to Harbin, she said she noticed children drinking milk from single serving boxes.
“You wouldn’t have seen that 10 years ago,” she said, noting that dairy consumption in China is still in the “nascent stage.”
“But it is rapidly growing, especially in the cities where there is a very international cuisine and many people who have traveled abroad, as well as many expats who live in China,” she said. “Cheese may not be part of daily diet, becoming it’s more common on special occasions for upwardly mobile Chinese who are serving cheese when they have cocktail parties.”
Pino-Gallagher said the Chinese dairy industry has undergone a rapid transformation, with the government now in charge of the entire supply chain to ensure quality control and product safety.
She said the Heilong Jiang government has made the transition from the individual, one-farmer, one-cow-type operations to very large farms with 10,000 to 15,000 cows.
“What’s interesting is that they are realizing that there are management challenges with that size of farm,” she said. “They are now looking at building many farms in the 500- to 2,000-cow dairy size. They want to diversify where the farms are located, spreading them out throughout the province and have smaller-sized herds.”
Nestle has built a training facility in the province because the Swiss company believes growth in China hinges on being able to get high quality milk, she said.
“This is to teach the Chinese how to produce milk to the quality Nestle needs,” she said. “Nestle sought out Wisconsin to provide the training. They are also sourcing equipment for the dairy barns from here. One example of a piece of equipment often not thought about is cooling systems and fans. But milk production falls when it is too hot for the cows. When we go over, we hope to tour that facility and see Wisconsin ingenuity and know-how at work.”
Pino-Gallagher said her department hopes to educate the Chinese public about cheese at the event.
“One of the things we are doing is displaying examples of Wisconsin cheese,” she said. “We’ll have it at lunch, so people will be able to sample small bites of up to 16 different varieties to taste them firsthand. As a consumer, you’re not likely to buy something you are completely unfamiliar with.”
She said the delegation is not, however, bringing any ripe Limburger cheese from Monroe to the Chinese dairy expo.
“I don’t know if the TSA would let us through with something like that,” she quipped. “I’d love to bring some Limburger, but I think we’ll focus on milder cheeses.”
— By Brian E. Clark
For WisBusiness.com
