China's dairy firms bulk up with milk shortage set to deepen
High costs are hastening switch to large-scale production on mainland, as small operators exit amid big players' massive spending plans
Every morning in a small village in the northeast Hulunbuir Grasslands of Inner Mongolia, retired forest worker Li Shulin and his wife get up at 5am, milk the cows in the shed, load the fresh milk on a truck, and drive to the nearby milk station to sell it to Swiss food giant Nestle, a major raw milk collector in the area.
Having raised cows for almost four years, Li feels it is getting harder to make a living as the cost of forage grows rapidly and dairy companies' standards on milk collecting become tougher.
"The price of cow forage has risen much faster than the milk price during the past two years. Forage is now sold for 3,000 yuan per tonne already, which is nearly 20 per cent higher than a year ago," said the 60-year-old Li.
All dairy companies have adopted stricter inspection measures when collecting raw milk since a scandal on melamine-tainted formula ravaged the nation's dairy industry in 2008.
"Milk stations would reject your milk once they discover any suspicious chemicals or extra water in it," Li said.
Last year, the couple earned around 30,000 yuan on 10 cattle, a level that is not as attractive as other jobs in the mainland's thriving cities.
