Only quality first policy can revive dairies

More than half of China's dairy farms are reportedly incurring losses because of a steady decline in dairy product prices since early 2015. In March, the number of cows in stock dropped by nearly 12 percent year-on-year. And some dairy farmers culled their cows or fed unsold fresh milk to pigs to reduce their losses.

Chinese dairy farms are facing this problem because their products, despite being overstocked, cost more than imported ones. Imported milk powder, for example, reportedly cost 18,000 yuan ($2,700) per ton on average, while the domestic varieties can cost as much as 30,000 yuan a ton. Compounding the dairy farms' problem is the falling consumption of dairy products in China. The average annual increase in the sale of milk was 11.1 percent from 2006 to 2010, but it dropped almost by half during the next five years.

The oversupply of milk seems weird in a country where the per capita consumption of dairy products is only one-third of the world's average. With more than 10 million cows in stock last year, the production of fresh milk and dairy products reached more than 38 million tons and 27 million tons, making China's output of dairy products the third-largest in the world.