Review: Challenges and prospects for milk production in China after the 2008 milk scandal

The primary objectives of this review were to characterize the challenges faced by China’s milk industry after the milk scandal of 2008 and to propose prospects for the future. This review is supported by data and information from the literature, various statistical yearbooks and databases, administration documents, news reports, and the authors’ own investigations. After the milk scandal and the resulting decline in the number of dairy cows in China, more recently annual milk production has come to the end of a rapid growth period. Importing large quantities of dairy products, especially milk powder, has affected domestic milk production. The high cost of milk production in China is the key reason for the lack of market competitiveness for milk within the country. Dairy farms are facing stricter environmental protection requirements, which have become an important economic constraint for future dairy farming development. In the transition from small-scale to large-scale (100 or more cows per farm) dairy farms in China, more 10,000-cow farms have emerged, which has triggered a debate about the size of dairy farms. Although China’s milk production is facing some challenges, the continuous improvement of consumers’ income, the formation of milk drinking habits, and governmental support have developed a large market potential for domestically produced dairy products and milk production. Improving market competitiveness while ensuring economic and environmental sustainability are key to the future prospects for China’s milk industry. The characterization and discussion of the past, current, and potential dairy industry in China is intended to enhance understanding for dairy farmers, dairy enterprises, and the government to positively and significantly adjust the strategies for the dairy industry. Future research needs to address the effects of different organizational forms of dairy enterprises and dairy farmers on milk production in China.