A Chinese-Russian joint venture is building a 100,000 cow dairy farm in northern China for the supply of milk to Russia. The project, backed by Russian mining equipment company, Serverny Bur, and China’s Zhongding Dairy Farming, has already begun construction in the city of Mudanjiang in Heilongjiang Province.
Russia traditionally imported its dairy products from the West, but has imposed an embargo on agricultural goods from Western countries in retaliation for sanctions levelled against it for its actions in Ukraine. Despite these sanctions, the announcement of this mega-dairy has caused some alarm among European dairy producers who worry that it signals the permanent loss of a valuable market. If the joint operation can indeed reach full capacity, it could produce 800 million liters of milk per year according to Copa-Cogeca.
As part of a push for agricultural modernization, China has been working to streamline its highly fragmented dairy industry with the goal of consolidating to the size of three to five major producers. Currently, Modern Dairy with 40,000 head is China’s largest dairy operation – if this project reaches its projected scale, the new Russian-Chinese venture will be two and a half times bigger than the country’s biggest player.
However, there are industry experts who doubt that the project will indeed reach such a scale, and believe it is designed more to impart a political message to Europe; giving Russia clout to use in trade negotiations.
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