China has rapidly ascended to become the world's largest dairy importer by purchasing nearly 20 percent of the world's globally traded dairy products. During this same time, the U.S. has grown dairy exports in nine of the last 10 years. As a result, America now ranks third behind New Zealand and the collective 28 countries of the European Union in total global dairy product sales.
While those statistics are widely known, what most people don't know is that the U.S. and China have similar dairy cow numbers. At last count, it is estimated that China has 8.71 million dairy cows, up 22 percent from 2009's 7.12 million head, according to Foreign Agricultural Service (FAS) data released this July. Meanwhile, the U.S. dairy herd is estimated to be at a very stable 9.26 million head - stable when compared to the Chinese numbers anyway.
That's where the similarities end. As a whole, the U.S. produces 93.375 million metric tons of cow's milk each year compared to an estimated 36 million metric tons in China. As those numbers would indicate, there is a stark contrast in cow performance.
On average, an American dairy cow produces 21,825 pounds each year, while the Chinese cow yields 9,000 pounds of milk annually, according to USDA's FAS. Of course, all the Chinese data are best-available estimates as the country's domestic dairy industry continues to make inroads in collecting solid data.
All this adds up to a milk deficit in a country with 1.3 billion people. As a result, China's skimmed milk powder imports rose 89 percent to 131,000 tons, while imports of whole milk powder rose 70 percent to 487,0000, reported FAS. Likewise cheese imports are up 67 percent, while butter imports leapt 121 percent through May in a sign that the Chinese are acquiring a taste for a greater variety of dairy proteins.
There is no doubt China is a linchpin in today's higher global dairy prices. While Mexico remains America's No.1 dairy product buyer, China is set to move past Canada this year to garner second place if 2014's sales pace continues.
