Sunday, 16 June 2013

China Blog

Hi All, I am on the plane on the way to Louisiana, USA leaving the insane smog of China behind me. After spending 12 days in China I am just going to give you a bit of a summary on a country which Steve our token Kiwi on the trip referred to as a "a big black hole on the map" - a country which for the last 60 years has been enveloped in a shroud of communism and is often regarded with suspicion and mistrust by the western world.

China has a massive population (1.2 billion official and up to 2 billion unoffically) is going through a huge economic boom (which is apparently slowing, but there is still plenty going on!), their current GDP is around 10% being driven by heavy investment in construction. Every city we visited had at least 50 high rise developments and major road infrastructure projects. The majority of these new buildings are empty, driven by government encouragement to get the largely rural Chinese population into the urban areas.

The average Chinese farm is about half an acre, this is really holding their production back. There is little to no mechanisation, the farming community is uneducated and there is a stigma of poverty attached to the rural Chinese community. The government wants to consolidate these small acreages to increase productivity to eventually be totally self sustaining (china currently provides 90% of it own primary produce...not a bad effort when you see how they farm). Interestingly, and a major factor that is holding Chinese agriculture back is that a farmer can not own the land, he or she can only rent it from the government which stifles any real investment into infrastructure and fertility improvements.

Food safety has been the key message we have taken home from China. The Chinese people are becoming more affluent and are becoming more conscious of where their food comes from. This is providing huge opportunity for Australia and New Zealand, who the Chinese have identified as a safe food source. Milk is certainly under the spotlight since the melamine scandal, with wealthy Chinese happy to pay 3 times the price for infant formula from overseas as they don't trust their local industry.

As the Chinese become wealthier they are wanting more dairy products. Dairy is regarded as a luxury product, especially fresh pasteurised milk (majority is consumed as UHT). We visited a number of dairies in China including Migenu which supplies 20% of chinas dairy market, it seems to be the go ahead ag industry where dairy herds are vertically integrated in the the processing and distribution chain to be assured of quality and traceability. US and european dairying styles have been implemented with all these dairies housing their cows and feeding a ration of traceable feed stuffs.

China is turning the corner from its insular communist past, it has recognised the western world has got a lot of things right and now it is in catch up mode. The Chinese are hungry for advice and information to make them more competitive and productive. This is heavily encouraged by the government, for example the government is buying Australian dorper and Suffolk embryos having them transplanted into the native Chinese sheep to get some genetic improvement and giving them away to the farmers.

A quick note on sheep in China....well the province of Inner Mongolia has 80 million sheep alone, but they are a motley crew I can tell you! Sheep are really run as a sideline type thing, grazing on roadsides (the government has recently banned this practice which will wipe about 30 million of the population in Inner Mongolia) Lambs are sold at around 5 months old at 35kg. Sheep tend to be run in the dryer areas (200-300mm annual rainfall) and observing some flocks they don't get drenched too often. A positive thing for Aussie lamb farmers is that in the last 5 years chinas demand for lamb has risen by 50%. Pork is the most popular protein in china, however on a visit to the major meat market in Huhot nearly half of the sales were lamb. The cuts the Chinese prefer are different to us, they like the poorer cuts, which reflect in their pricing structure, where a lamb shank is worth $5/kg and the loin is only $9/kg (wholesale prices). A carcass retails for $7/kg.

Well that's all for now, I am going to take this flight as an opportunity to recharge after nearly 2 weeks of cultural experiences (good and bad!) a rather large night partying in Beijing (still wounded) and the brilliant experience of climbing the Great Wall of China (you have got to see it to believe it!)

Cheerio xxxx

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