China’s second-largest dairy producer and the Dairy Farmers of America (DFA) cooperative will build a plant in Kansas to produce powdered milk for the world’s most populous country. DFA will invest $70 million and Inner Mongolia Yili Industrial Group Co Ltd will put up $30 million for the plant, which will produce 80,000 metric tons of milk powder yearly, according to an agreement announced on Wednesday [12 November 2014]. DFA is a Kansas City, Missouri-based cooperative and represents nearly 13,000 producers across 48 states and accounts for one-third of raw-milk output in the United States, according to the cooperative. It buys raw milk from its members and processes it into dairy products for wholesale…Full Article: China Daily Nov 2014

Key Point

  • In 2013, infant formula sales total CNY 60 billion (~US$9.8 billion), while Chinese milk powder (incl. infant formula) imports comprised 38% of global imports.
  • Infant formula sales in China are expected to reach CNY 100 billion (~US$16.4 billion in 2014 dollars) by 2018.

ChinaAg Comment

  • Yili Group traces its roots back to 1956 when it operated as a dairy cooperative in Hohhot, Inner Mongolia Region. In 1993, the company was restructured as Yili Group and began its ice cream operations. Currently, Yili produces milk, milk beverages, sorbet, ice cream, milk powder, milk tea powder, yoghurt, and cheese. Since 2005, the company has been China’s top supplier of milk powder and milk tea powder.

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