According to experts, the price of raw milk fell dramatically in the international market. In August, the CIF price of international raw milk was 2.4 yuan per kilogram, 1.5 yuan lower than that of domestic raw milk. The competitive low price of international raw milk has resulted in a substantial increase of imported dairy products.

In contrast to falling international milk price, the domestic cost of cows is increasing. At present, the production cost of raw milk in New Zealand falls between 2.5 to 3.0 yuan per kilogram. In Inner Mongolia, the production cost of raw milk is 4.2 yuan per kilogram, 0.5 yuan higher than the domestic purchasing price, which means that all cow farms are being run on a deficit basis.

"On the one hand, the dairy market suffers from weak demand. Although China has a large population, the per capita consumption of dairy products in China is smaller than half the average in developing countries and one-third of the average in the whole world. At the same time, cow farms are characterized by a low level of standardization and a small scale. Though standard large-scale cow farming has witnessed rapid development in recent years, the total level is still low. At present, almost 30 percent of raw milk supply comes from non-standard small and medium-sized cow farms in Inner Mongolia," comments an industrial insider.

Some people in Inner Mongolia, the leading player in the dairy industry in China, have racked their brains in order to promote the dairy industry’s healthy and rapid development.

At the Third Session of the 12th National Committee of the Chinese People's Political Consultative Conference (CPPCC), CPPCC National Committee members from Inner Mongolia jointly signed and submitted a proposal entitled The Proposal on Further Promoting the Healthy Development of the Dairy Industry.