Dairy Industry: income growth, while profit growth difficult

2010, 2 months, the National Dairy products1578 tons of Shenzhen Port, 17.9% more than last
Production of 3030 thousand tons, up 7.8%,year. The average import price of 1611 U.S. dollars /
continued growth, including 2550 tonnes of liquid dairyton, sharply up 68.2%. One February, China's imports
products, up 7.1%; 1 February, the National Solidof milk fat type and cheese class and 47.76%
output of 256 tonnes of dairy products, and 224respectively year on year growth of 123.16 percent;
tons in January up growth of 17.97%, unchangedskim milk and whole milk powder imports increased
from a year earlier in February.109.71% and 49.75%, demonstrated the import
In the first 2 months Dairy Cumulative income andprices are within the peak. The export situation is
cumulative total profits grew 18.63 percentvery bleak, fell to the bottom.
respectively, and 8.99%, Sell Margin of 5.32%,The main raw material base of domestic milk powder
balance was 55.10%. Revenue growth is the highestto high, the price per ton of milk-based powder
in nearly a year, but the total profit growth and30,000 yuan / ton, compared with last year's second
return on sales is the worst year, showing the dairyquarter increase of nearly 20,000 yuan. From the full
industry in the rapid income growth, profit growth isyear, the CIF value of milk powder imported raw
still difficult.materials is expected to reach even more than 3000
2010 the first three months, the country of 10U.S. dollars / tons, and domestic raw milk prices are
milk-producing provinces and regions Raw materialexpected to reach 35,000 yuan / ton. 2010, 3
Milk prices rose slightly, and gradually become stable.months, the national average market price of bags of
As of March 10, weekly average price of roughly 2.72milk remained stable, the average price of 3.19 yuan /
yuan / kg, up 5.28% over the same period, the500 grams, slightly higher than 0.51% over the same
lowest price compared with 2009 2.31 ~ 2.32 yuan /period last year. Although the performance of listed
kg up 17.38%. Dairy cattle breeding costs to risecompaniesdairy growth, but the industry still faces
sharply, Milk Production demand, imports of raw milkmany difficulties, is still very strong profitability,
Milk powder Prices led to rising raw milk prices of thecombined with generous input caused by
main reasons.overcapacity may be reflected in the near future, but
1 quarter of this year, corn prices rose an average ofalso will enhance the profitability constitute adversely
23%, significantly higher than the same period theaffected. Dairy prices also subject to the upstream
level of raw milk. Although soybean meal prices, butand downstream, the industrial interests of the chain
overall, a quarter Feed The overall rate of priceimbalance, dairy farming difficult, will become the
increases over the rate of increase of raw milk. Cownorm in recent years, price volatility, industry and
in China still faces difficulties.company earnings forecasts more difficult. We still
A quarter of this year, imports of dairy products,maintain the "neutral" rating.