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>> Sarah Schutt: It's my pleasure today to introduce our Global Hot Spots speaker.
Professor Pamela Ruegg
is a professor and Extension milk quality specialist in the
the University of Wisconsin Madison. Department of Dairy Science at
She received her undergraduate degree and Doctor of Veterinary
Medicine from Michigan State
University and completed a residency in food animal herd health and reproductive
management and a master's in
preventative veterinary medicine from the University of
Previous professional experience California Davis.
includes private veterinary practice, faculty positions at both Atlantic Veterinary College
in Prince Edward Island, Canada,
and the College of Veterinary Medicine at Michigan State University and technical service
with the Monsanto Company.
Her Extension program is focused on improving milk quality and safety on dairy farms.
Her research interests are
focused on epidemiological techniques to critical issues related to milk quality and
safety, and she enjoys bridging the gap between research and
practical application on dairy farms.
Dr. Ruegg is a frequent speaker at dairy and veterinary conferences in the United States
immediate past president of the National Mastitis Council. and internationally and is the
Will you please join me in welcoming Dr. Pamela Ruegg.
[APPLAUSE]
>> Pamela Ruegg: Thank you, Sarah. And thank you for the invitation
to speak here, and most of all, thank you for coming today. This is spring, right?
today I thought I'm sunk. I'm absolutely sunk. And when I saw this weather
You can see a row of people there slightly lower than the I even, limedian age.ed my grad And I'm like, geez, you guys
might want to come to this
because I thought maybe they might be the only ones here.
the opportunity to share some of So I am glad to be here and have
my experiences and to talk a little bit about this really
really interesting country. The kind of mysterious and interesting, my experiences in a
emerging country of China. I'm going to speak today on milk
safety. I'm going to touch a little bit on the melamine issue.
shorter amount of time on some I'm going to touch an even
kind of interesting things that are going on in China on dairy farms relative to management of
some of the byproducts of producing milk. And I'm going to speak of it all
So be prepared for that. from really a ground level area.
Okay. NoHow many of you have been tof you have been to China? Wow.
Excellent. farms in China? Okay.
So I'm really looking forward to Were those dairy farms? No? Okay, great.
the question and answer period at the end because it looks like
this room and experiences. we've got a lot of knowledge in
Well, the way I'm going to present this today, I can't just
the melamine issue because just like everything in a big kind of start off by presenting about
emerging country full of people, the context of the Chinese dairy
industry directly influences
this issue of melamine and the issue of dairy farming. So I'm going to spend a fair bit
of time talking about the context of the dairy industry,
industry. So it's very important that we and it's different than the context of the western dairy
understand this. I'm going to talk a little bit
about the Chinese dairy farm
structure. I'm going to talk then a bit
specifically and some other milk about the melamine issue
about my observations about some safety and animal welfare issues. And I'm going to talk a bit
of the challenges that are facing the Chinese dairy
unpredictability really of where industry and really the
that industry is going to go. So I hope that at the end of that time we'll have some
interesting conversation. This picture, by the way, was taken at what they call an
I was giving a seminar there or a seminar in a region for a bunch of dairy professionals, veterinarians, and farmers, and
in the evening after we finished
village. the seminar, they put everybody on a bus and bused us all up to this area which was an ancient
And I was kind of surprised when I got on the bus that the Chinese participants were so
interested in going to this village.
the cultural revolution there and how so much of really the Aancient history and the really introduction to the impact of
villages, etc, didn't survive the cultural revolution. older interesting parts, the
And it was interesting that the people that I was with were just And this was, indeed, one place that did.
as interested or possibly more interested in touring this area
than I was. So before I get into the heart
I am not an expert about China. I am an expert about dairy cows, of my talk, though, I need to give a little disclaimer.
especially preventive health management of dairy cows.
I am not a expert about Chinese dairy agricultural policy, and I
I have, however, been to China don't study China nor do I do research in China.
three times since 2005. Each of those visits have been about two weeks in duration.
I've been to about 30 or more dairy farms in China. Very intense visits most of the time to these dairy farms.
I've worked in four different regions of the country. Almost all of the dairy intensive regions in the
country.
I've met many local Chinese officials, and I've taught intensive technical courses to
hundreds of Chinese dairy professionals and veterinarians and veterinary students at two
there. of the veterinary universities
So I'm not an expert, and today what I'm speaking on is really my experiences and my
observations. And kind of my summation from the ground level of these important issues relative to
milk safety.
Now, when he we think about the context of the Chinese dairy industry, now there's many in
the room that have been here, but when I speak to my own
haven't been to China, the family who hasn't been to China or others in my neighborhood who
context of what it's like this is just not grasped.
felt the same way when you And probably many of you have
visited there. This is Nanjing, I believe it's Nanjing, and it's one of the
beautiful urban centers in
China. And the cities, probably most of
would agree, the cities are spectacular. you in here who've been there
don't know, last fall sometime, right before the Asian games I was in Guangzhou last November, August sometime, I
kind of the rehearsals. They did the entire fireworks show the week before to prepare. And they were actually doing
I've never seen such beautiful They had flowers everywhere.
cities. Everything is new. You've got these spectacular
skyscrapers.
Lots of light at night and it's just very, very spectacular to see.
The urban middle-class is enormous. Several times, when I go there
people from the US, I'm with I'm typically not with other
Chinese people. And when we go into the cities sometimes in the evening when
we're done with work if we're in
an urban area, it's just amazing to me the amount of wealth that just the Joe person on the
street has. And when you think about China, I think our image more and more is this.
And, in fact, just under half of
the Chinese population of about 1.3 billion people live in these urban centers.
So it's only about half of the
1.3 billion people in China in population. When we look at the Chinese demographic statistics there's
contrast to 300 million here in the United States. When we look at the GDP, even
though when we visit there we see a lot of people who are living very nice lifestyles, the
$7,400, whereas the US GDP per person GDP there is about
force employed in agriculture. is about $41,800. Even bigger contrast is looking at the percent of the labor
In China, 38% of the labor force is still engaged in agriculture.
ways, even though that's not It's an agrarian society in many
what we see as being portrayed so much.
percentage is about 2% to 3%. So very, very different structure. In the US, the equivalent
when you think about policy decisions relative to dairy farming, relative to rural areas This is important to understand
the population there lives in these cities is that's where the because one of the reasons half
in these emerging countries, is to maintain a stable rural higher paying jobs have been. And one of the desires, often,
get made relative to regulating and policy in the dairy sector population. So a lot of the decisions that
are influenced by this desire to have people stay in the rural
areas.
And there are, even though it's a relatively small percentage, there's approximately 57 million
people who live on less than
book. Yesterday I checked that number again because it just seems And thincredibly low.IA fact
So the context of this is these tremendous contradictions, and
Look at this skyscraper and then I'm going to come back to contradictions more and more.
look at 57 million people living at a very, very low rate of consumption.
So the take-home on this is beautiful cities, huge urban, middle-class city dwellers but
the rural workers is enormous. the difference between that and
most of the rural people are When you look at the context of the people that typically are working in the dairy industry,
very, very different than the last picture we just saw looking And this is not bad housing for dairy farming in China, but it's
And when you look at dairy at the cities and the new structures there.
farming as part of the overall agricultural sector in China, it's important also to recognize
that just like here most of the time, dairy farming is one of the most profitable rural agricultural activities.
So there's an advantage in
maintaining dairy farming and promoting dairy farming that goes beyond just having a high
protein and high quality protein
source available for the consuming public. So there's a real advantage on
that. And so these are just things we have to think about when we're
Now, the last time I was in China we were in, I think this looking at the context.
part of the country, in Nanjing it's got thousands of years of was in Nanjing, and in Nanjing, which is in the southwestern
culture and Chinese history. And in Nanjing there's a
learning center there that was
touring kind of around there, we very, very famous decades-- Thousands of years ago. It's very interesting, we were
went by there, we went into a museum and there was this kind of a diorama.
And I only have two pictures
that I took of it, but it points out a really interesting thing
really think still applies about Chinese culture that I
today. In this fable, so the only way I
people I was with, I said what knew this fable is I asked the
There was this very poor peasant does this show? And they instantly told me this story.
who was very smart and managed to get admitted into this famous
He went to the school and he got learning center in this region.
was then married off to the local noble or the emperor's And the person, historically at this time, who got the top marks
daughter and the queen, and what daughters in that region. And so this is the emperor's
this is, so he's there to get married, this diorama is a little bigger, and in comes
marching his actual wife with his children. And they're complaining that, hey, he can't marry her and
become enormously wealthy because he's already married to us and we have a right to him even though he won the top
marks.
And it's kind of looking at this contradiction between the enormous wealth and the ability
to achieve through education and
then also the rights of the lower and the poorer people. And I put this in here simply
because those same aspects of the culture apply today in many ways. And it's pointed out a little
bit here. This is, if you could see the sign behind here, this says the Shanghai Institute of Dairy
Science, and this is a brand new
facility. This was actually on the inauguration of their new
laboratories last year. Their laboratory facilities are way better than mine. Beautiful new facility in
Shanghai. And this guy right here,
Dr. Fang, is one of the team members, one of the PhD
scientists there, and he is the son of an absolute peasant. An absolute peasant in a rural
And when you talk to him, how did he end up in the Shanghai Dairy Institute? area.
good student and worked very, very hard. It was because he was a very
So the meritocracy in China is very true.
And it goes back a long time and
that's, again, one of the contradictions is yes it is very possible to achieve but, boy,
there are some constraints
around that. So there's a lot of people like that working in the dairy
industry as well and having an
nor can I talk about the impact there. But, as I get into the melamine scandal, I can't talk about it
challenges that face the Chinese dairy industry without being
corruption. This is a one-party rule, and in very overt about the problem of
any one-party rule anywhere in the world, and in other places
that don't have one-party rule, it's very easy to develop corrupt governments.
ranks governments around the And Transparency International
world using what they call a corruption perception index.
is a legitimate scale looking at It's my understanding that this
ways to compare corruption across different countries. The scale is one, meaning highly
corrupt, to 10, meaning highly
clean. The best score out there for
and those countries are Denmark, countries right now is 9.3,
New Zealand and Singapore. They all are tied at 9.3. The worst score is Somalia
at 1.1. The China score is not so hot.
it's coded orange. It's about 3.5, indicating, and if you look at it on a map
Orange is slightly less corrupt than bright red. So it's in the bottom of the
pack relative to corruption.
For comparison sake, the US score is 7.1, just to
to the world we live in, which give a frame of reference
is towards the top of the pack. It's not the best. There is corruption here, but
it's way better than China. And this issue of corruption has
enormous impact on the ability to guarantee safe, high quality
food products coming out of China, and I'll show you why in a few minutes.
in ensuring safe and high quality food products is the gap One of the problems we get into
between the farm workers and the government officials relative to
societal status, relative to
This is a woman delivering feed on a large, this is actually a education is absolutely enormous.
one of the local government officials in one of these large induregions.ed dairy. This is a veterinarian who is
She drove up in her brand new Mercedes Benz. We met her at her office.
I am a veterinarian. Okay? She's a government veterinarian.
I know veterinarians all around the world. I know many veterinarians who
work for government.
I have never seen a government veterinarian drive up in a
[LAUGHTER] Mercedes Benz.
This is, I was actually trying to get to know her a little bit and she's really nice.
She invited me to come and spend
time at her vacation home. And I was asking her how do you kind of do this?
And she said, well, I'm involved
in several of the livestock businesses here. Okay, conflict of interest here.
Conflict of interest where we have our regulatory officials involved in regulating
Some of this is growing pains on businesses they're involved in.
government structure that isn't a counvery flexible.pidly developing an economic system and some of it is a result of a
the ability to produce high quality food products is simply Anotrural land management. to think about as we think about
in, and in some cases around, cities, rural land can't be privately owned. Rural land in contrast to land
you think about farming because when you think of the culture of This is really important when
farming here, our farmers farm why?
Because they love the land in many instances. And when they think about their futures, what they're typically
thinking about is assuring
futures for? Future generations in the same
In China, the farmland is leased place.
for approximately 10-year periods. I was on one farm there with a
guy who was in the eighth year
of his lease. He was one of the best farmers that I've interacted with in
China.
And I said, well, how do you do On his farm wthat?talking about hiAnd he pointed at the localhe government official across the
table from us and said, well, he
approve all expansions, and it's has to agree to let me do that. Okay. The local land committees must
area. nSo the investment in farms is, committees here as much because the land is owned by the local
thus, smaller, and it's more uncertain as a farmer whether or
not you should really invest in a facility because your long-term ability to recoup that
secure. So this is another very important issue relative to invlooking at the ability to as
produce safe, high quality food and really to move a dairy
context I'm going to talk about. industry along. Okay, that's about all the
Let me get into a little bit of the heart of the dairy farming issue here and the safety and
quality issues that we see. First of all, let's take a look at what's happened to dairy production in China.
I put together some stats from
1999 through 2010. First of all, let's look at this
This is the total production of milk in the United States in top line.
almost two hundred billion millions of pounds. So that's approximately up here,
pounds of milk in the United States. That would be our total
production last year. This little Bucky bar graph down
And actually it's kind of interesting, it might look flat because the overall scale is so high, but in fact, there was a
slightly declining period at
around 20 billion pounds per year. It declined a little bit in the
early 2000s but the trend is
mid-'80s or early '80s that actuwe've seen that trend.in. Slight trending upward which is the first time since I think the
production. And what you'll see is there was And then the red chart or bar graph is Chinese milk
just incredible double digit growth in Chinese milk
production. We're looking somewhere around
cows, increasing the number of 20% to 30% annual growth. A lot of that was from adding
cows milking in China from about 2002 all the way up to 2008.
has actually declined because of? Melamine. ButAnd we'll get to that in aon
minute. This melamine scandal, this melamine milk contamination has had on enormous impact on dairy
production, and it has an continuing impact, you can see
that 2010 milk production in China was actually even lower
than 2009.
Would you look just as, again, a frame of reference, when you
think about, we're in Wisconsin so what do we think about? think about milk here we tend to
Cheese, right? We think about cheese here in
Wisconsin because about 95% of
our milk here in this state turned into cheese exported from our state.
It's an economic driver in our
state. In China people don't eat cheese.
It's not a normal food so much. Although, there's starting to be
increased consumption of it. What they consume is UHT milk
and milk powder, and, of course,
there's a big movement by the Chinese government to increase the consumption of fluid milk of
children in order to encourage
better nutrition in children. So what we're thinking primarily in China is mostly fluid milk.
Now, in the United States the way that our dairy supply chain works on most places is dairy farmers individually produce
milk. The biggest farms load it on to trucks, and those trucks drive
But the dairy farmers own the farms, they own the cow, they produce the milk, and the truck brings it to the processor.
Smaller farms, like about 13,000
of the farms we have here in Wisconsin, you'd have several farmers producing milk, storing
it in a bulk tank, and a truck
driver, private truck driver, would go around and load the milk from the bulk tanks into
his truck and drive it to the milk processor. Those are our two main supply chain models.
In China, we've got things that are a little bit different. In China, we have many, many
So you have many individual small farmers, and those farms small farms.
necessarily even a big truck but may be so small that a middle man, for example, not
maybe even smaller than that, there might be a milk collection center where they bring their
milk and they dump it into a
container that then gets picked laup and commingled with manybe farms thaother farms.ly large enough so they may have a small
between the individual small But the take-home point here is
farmers and the processor, there's somebody in the middle. Commingling milk from many, many
farms, making it almost untraceable, actually, as to the
origin of the commingled milk. That's one model.
Second model would be, well,
them into what they call dairy there's a lot of small farms in one region so they've taken these small farms and they put
gardens or dairy villages where maybe you have 15 farms all on the same land mass, every one
may be living there and they all
milk the cows in one central facility. The cows are housed in separate
barns, but they're milked in one
That's a fairly common model as central facilwell.oing into one And then finally, we've got giant vertically integrated milk
processors. And this is where we've got usually a very large
Maybe the owner is some company based out of Hong Kong that is agricultural firm.
successful in pork production so an expert in pork production, and they've been wildly
they've decided diversify into milk production.
vertically integrated where you've got a corporate farm that And they're completely
So three very different structures than what we have milk goes directly into processing.
the smallest farm. here in the US. So this would be an example of
85% of the dairy farms in China, in fact, contain about one to five cows.
That supplies about 70% of the
So that's a very different milk. There are approximately 1.5 million very small farms.
structure. When you drive down the road you
And these would represent that may see cattle out grazing.
structure. In fact, all of those cattle may
people. They may have someone out there watching them. belong to several different
back, they'll milk them, that would be supply chain model one. And then they'll bring them
This is the supply chain model two.
These are the these dairy villages or dairy gardens.
In this example, here you've got these different barns.
The different barns all contain the different little herds of cattle and each barn may be managed completely different.
One farmer may be a really good farmer and the next farmer, well, may be not so good. And then they're all together
milked in one standard facility.
And these are what we call whey jars.
milking their cows, the farmer So when each individual farm is
would then record the amount of milk that fills up in these jars on each cow, and then at the end
of the milking he's got a little
slip with how much milk out of the whole bulk tank that his
So the milk is all commingled but each little herd is individually owned. And then we've got urban
corporate farms.
to our privately owned larger And tfarms here in the US.farms wouldAnd just as a frame offace in many instances, very similar
the United States are privately owned. reference, 99% of dairy farms in
99% of those farms are typically family businesses.
Even the biggest farms are
usually family businesses. Here, you've got an urban corporate farm, these are
usually corporately owned, and
you see things like very sophisticated, this would be a
cattle get on at one point, milking unit is attached, the cattle ride around on a carousel rotary milking parlor where the
then they'll get off. And then you see more concentrated housing units. wAnd then you get into some ofd
the biggest farms.
very, very large agricultural This is a pifirms.I took last fall, and these are the type of farm that are owned by these
Within China there are just a few very large companies that actually dominate the large scale production sector.
This is a picture of an observation room on one of
those. If you look hard at this, and it
doesn't show up very well, this is a model of the entire
of this farm with important politicians. facility. These are pictures of the owners
And this window looks out over the milking facility.
I have never seen anything
equivalent to this in anywhere in North America, and I've seen several of these in China.
This picture is on the wall in
another facility, and even though they're showing beef cattle, those little brown
things are not dairy cows, even though they're showing beef cattle, these beef cattle icons are representing the places
where this agricultural firm has
dairy farms. And you can see that this one particular firm has dairy farms
in all of the important milk
And I think there's three or producing regions in China. It's a very big producer of milk.
four of these processors that actually end up processing a large proportion of all the milk
in China. In these big industrial farms,
they use, of course, a Chinese industrial model.
This, again, was a picture I
This is employee housing. It's just like making iPhones, Very different from what we see here.
to a certain extent. The employees are migrants who
have moved there to work on this
farm. They may or may not know anything about dairy farming or
dairy cattle. They're employed by the farms,
So it's a very, very different and they live in these little houses using this typical model.
structure. One of the things that has
to China is this thing that I guess I'd refer to as cognitive dissonance. Cognitive dissonance basically
means you look at something and it'd be like I look at your sweater and you say my sweater
She's got a blue sweater on. is red.
And I say, oh, it looks like it's blue.
Cognitive dissonance basically And you say, no, no, it's red.
means that what you see doesn't really compute with reality or what you're told.
And so most of the farms that I go to in China, the bigger
what? Grazing and happily wandering farms,around pastures.tiful pictures depicting cows doing
On this farm, and be prepared for this, this is what the cows looked like. This is exceedingly rare.
So this is the reality that what Okay?
on Chinese farms, I'm sorry to you see is not what's being marketed in many instances. This is not an unusual situation
say. Now, we do have some of these vertically integrated farms.
This is an example of one of
these vertically integrated farms. You can see this is their sign.
They show they've got deer. They've got crops.
They've got their processing plant, I'll talk a little bit
more about that later, and
they've got their cows. Again they're showing their cows on pasture or in beautiful free
stalls. And this is, again, another sign
in the processing plant from this particular facility.
This is, I think it's pretty
This is where the cows are nice looking bunker silo, but this is the reality on this farm, there are not pastures.
housed. So, again, what you see and what the reality is just doesn't
compute.
Now, productivity is an issue as well that impacts the ability to
China. produce high quality products in
That's about 40% of the US The estimated annual milk per cow in China is about 960 gallons per cow each year.
productivity which is about, on average, almost 2400 gallons per cow per year.
And the big reason beyond that
picture I just showed you that really shows not a very high
they have many problems with performance-oriented facility,
nutritional management. This is corn stover. In the US this would almost
never be fed to cattle. It's too low in energy. And there they basically are
purposes so they're feeding byproducts which is environmentally sound but have using the grain for other
So the amount of yield is much very low nutrient quantities.
I'm just assuming that everyone in here doesn't know how milk quality is measured or assured quality issues.
spend just a minute talking about that. High quality milk is produced when farmers have management
systems in place, when they work
with their veterinarians and other advisers to ensure that the cows are healthy.
They also, then, have to harvest
it hygienically. It has to be cooled rapidly and then the milk is routinely
monitored for the presence of inflammatory cells that indicate
bacteria which can originate that the cow may have mastitis. It's monitored for the number of
from either the udder but more commonly from non-hygienic
And milk is monitored routinely for the presence of adulterants. milking or inadequate cooling.
And when I say adulterants I mean things, anything in milk
that isn't there when the cow produces it, when a healthy cow produces it, let me say that. So adulterants would be anything
like antibiotics or pesticides
or sand or water or anything that isn't in the naturally produced product.
And the problem is when you think back to what I've told you
about the context of the Chinese dairy industry,
1.5 million small farms, very little regulatory apparatus well in place, not a lot of agricultural education programs
at the ground level, many Chinese farmers really aren't well educated about how to
And you also have to be in the measure or produce milk quality.
context of many of them are struggling to survive. And you know when you think
about the hierarchy of needs, the cow's not going to be at the
top if you're not able to move your own needs up a fair way.
So this is one of the issues. Now, here in the US, every dairy
farm has to have a license and those licenses come along with
an inspection schedule which is done by our state regulators
according to actual national standards for milk quality.
In China, the local veterinary
going to a farm. authorities are responsible for ensuring milk safety. And this is one of their trucks
However, just like I showed you that woman that, the woman veterinarian, many of these
local regulatory veterinarians
and authorities are also engaged as local partners in the dairy
So this is some potential for conflict of interest here. operation.
And it's been my observation that this system is not very
effective.
Oversight, compliance, and understanding of the proper way to regulate milk is seriously
inadequate in China.
And this is going to impede the development, and has impeded the development, of their dairy
industry. Okay, that brings us to melamine. 2008, how many of you heard the
melamine milk contamination issue?
dairy industry here in the US were not happy about that because anything anywhere in the And those of us that work in the
consumer trust in our product that we work very hard to produce in a high quality fashion ultimately impacts our
industry here.
You can add water, you can add So just overall it's not very difficult to adulterate milk. It's not that hard to do it.
antibiotics, you can treat a cow and not withhold her, which is
So the production of safe, what is supposed to be done.
high quality milk depends on having A, integrity of producers
We have to have a culture of and processors.
quality. We have to have producers that
so they can focus beyond their are able to meet their own needs
own needs. And we have to have producers that are well educated and aware
of the risks. And there's many people within
We also have to have transparent our system that work on these areas.
and effective milk testing and regulation. And the producers have to
actually believe that the regulatory system is effective. So in 2008 approximately 300,000
ingestion of milk containing Chinese people were sickened by
And there were 22 separate dairy melamine. At least six babies died of kidney failure.
processing firms which were identified as selling this contaminated milk.
Melamine does not belong in milk. And the babies that died, died
formula that had been produced when they were sold infant
the milk? Well, farmers are paid based on how much milk they produce, the volume of it, and the amount of
unusually fat and protein in
that milk. It's measured and then their
The reason for this is if you add water to your milk, what milk payment is adjusted.
protein? will happen to your concentration of fat and
It will go down. So you measure the fat and
freezing point, essentially, of milk. That's done routinely here in the US to try to detect if this
happens.
Chinese and none of us could So here's an example. I didn't have any examples from China, and if I did they'd be in
would be very equivalent. These are individual farmers. exampHere's the quantity.at a milk collection center, which
with 5.8% fat and 8% solids, nonfat. This is 2.1 liters produced
in it. That's water buffalo milk which is why it's got so much fat
You've got this one, 1.2 liters, If you look along here, most of these are in that range until you get down here.
3.5% fat. Does not compute for water buffalo milk.
Okay, a little water was
probably added to that. So that's how the testing is really done.
And this is the reason melamine was added to the milk.
done to look for protein, they're really looking for Melamine contains nitrogen. When the laboratory tests are
diluted milk will artificial nitrogen. And adding nitrogen compounds to
increase the protein content and mask the dilution with water. Very simple.
People were cheating, and the melamine was intentionally added
So this scandal is really pretty in an attempt to get around the system.
interesting. 2008 was the year of the Beijing Olympics.
And if you read through the time
line on this scandal, the dairy processors and Chinese authorities knew about the
melamine in the milk prior to the Olympics, but they didn't want any bad publicity so they
Now remember people died as a result of this. And the way it was exposed is supeven more interesting.on.
One of the big three processors in China is called Sanlu. Fonterra is an enormous milk
and Fonterra purchased 43% of Sanlu. cooperative from New Zealand,
So they're a minority partner in this processing plant.
The Fonterra group learned about
New Zealand prime minister. Now where was New Zealand on could not get the Chinese authorities to act, went to the
that corruption scale? It was one of the best in the
world.
The New Zealand prime minister exposed the scandal.
authorities. Contacted the Chinese
So questions remain about the ability to regulate food safety. These are pictures of the
regulatory system in a dairy
village today. So here's the farmers producing milk.
This camera is in that milking
parlor taking video of that process. Then in the milk house, this is
the milk tank, there's a camera up here honed in on the lid.
And outside this farm where they unload that tank, there's a
camera honed in.
adulteration of milk. This is a completely ineffective local veterinary authorities in an attempt to reduce
milk regulatory process. You cannot regulate and produce
high quality food by putting
cameras on people. What you have to have is a
And that's shown in some of the recent milk safety problems. system of integrity.
In 2010, 2100 tons of milk powder contaminated with
melamine were found.
February 2011, huge incident The authorities are saying that was leftover from 2008. Okay?
three babies killed by nitrate with milk contaminated with leather protein, and in April 2011, 36 people were poisoned,
added to milk. The Chinese authorities have
that was an intentional contamination by a rival just released a statement saying
In fact, this is a recent statement about the outcome of a dairy firm. I don't know if it was or not.
protest, one of the fathers of one of babies who was sickened,
but did not die, was protesting and suing and he got
thrown in jail for that. And if you read this, which I
don't think you really probably can see it very well, basically he's been released and he said
in complaining about this. oh, he made a terrible mistake
That he should have better trusted the authorities.
Chinese authorities to attempt So there is some movement by
to improve the quality and safety of the milk. There's an aggressive attempt
this year since January 1.
What they're trying to do is reduce the number of processing plants.
If they reduce the number of
processing plants, then there's less firms that they have to regulate and test.
So in 2011 they said every plant
needs to have a new production license, and they're expecting
close. up to half the processors to
This is a vertically integrated Bprocessor that I was at last still remains an enormous potential issue.
The dairy cows' milk was pumped directly from the farm on a daily basis into the processor This is vertically integrated.
Beautiful processing facilities, and processed.
way too big of a facility, but beautiful state of the art
I asked the manager of the processing facilities.
processing plant how long does the milk last after it leaves,
Three days. Three days shelf life. you know, the shelf life?
Okay, I'm going to finish up, but I'm just going to run you Ethrough very quick some otherd probablissues. weeks.
Other issues, really important
issue, completely unregulated use of veterinary medicines in dairy cattle.
Very prevalent. In talking to veterinarians and in talking to professors at veterinary schools, there's just
a big gap yet in the
understanding and evolution of really how to use medicines in
This is an area that's seriously the best preventive healthcare.
lacking. This is a real picture from my
And this is, I'm on, I think, the 21st story. I think is Nanjing as well. And you can see that there's
serious pollution and environmental problems. One of the interesting things and positive things that I've
seen a little bit in the Chinese
industry, it will be interesting to see how it evolves, though,
environmental issues, is manure technology. Here's a manure pond on a, this ris a large industrial dairynd
which has housing for all the employees.
And you can see that the employees have located all these
beautiful little vegetable
gardens, really well cared for vegetable gardens which they're fertilizing with the manure,
basically, from that. That's the small scale, but what
you've seen is the development of much larger processing,
including methane digesters and the development of very sophisticated manure processing facilities that are processing
the manure in immense automated systems.
This is a type of, like, aerator that moves through this system
on an automated basis.
That they're actually, on this farm, were telling me that
now than the milk. manure is more valuable right
They're selling that manure after it's been processed as fertilizer.
So they're really doing some
interesting things from that standpoint. However, there's a lot of
challenges to the Chinese dairy industry. Hygiene is an enormous
These are real farms, these are real situations, and they're challenge.
This animal, I was walking more common than not. Animal care is an issue.
around with the manager of this facility, two other farm facilities, and back here there
are approximately 30 employees
raking manure. It's a manual version of the
This heifer had gotten herself fertilizer production facility.
stuck on this pipe and nobody noticed. I noticed.
I stopped and I said we need to help that heifer. But the culture was not such
of the people working there. that that was even seen by many
So animal care is an issue that's going to need to evolve. Facilities are a problem.
I took these pictures either
last year or the year before. From a technical standpoint, the problem is with the translation
of the ideas. From a technical standpoint, one
well if they're in kind of of the things we like to say is calves, baby calves often do
incubator type things or isolated from other calves. But this facility is horrible.
So there's no air movement here.
paper is a good idea but it's been implemented incorrectly. And this place was even more They've taken a concept which on
This would be, in the US, in interesting.
free stall technology, which is a common way we house cattle, we often like to have sand-bedded
free stalls.
So here you've got sand-bedded free stalls and you've got
These are state of the art dividers.
dividers to keep cows separated, but they're installed upside
Okay? I was walking around the down.
facility, I pointed to these with the manager and I said,
hey, where did you get that idea? Oh, yeah we heard that from so
what do you think of those? I said, yeah, they're great, but and so, we read about these,
you in the US, we would have installed them the other way.
And there's a reason they're
installed the other way. It's because this area right
bottom so the cow's body doesn't here is supposed to be on the
impact it and so you don't get things like pressure sores. There's disease challenges.
This is the only picture I have ever taken of a dairy cow being milked on one quarter.
Normally they're milked on four, Cows have four teats.
occasionally you'll see them milked on three, I've never seen
And the reason is because of them milked on one.
subclinical disease in that udder. And then this is
facility-related lesions on cattle. So lots of disease challenges.
This is, were any of you here? Okay, just want to conclude.
Probably some of you were here. This is the tomb of Sun Yat-sen, and to me this just epitomizes
the contradiction.
Here you've got an enormous complex devoted to the guy who died where?
Where did Sun Yat-sen go? [INAUDIBLE] Well, he was, you know, Taiwan, basically.
He was the anti-Mao and he's honored. He's got a beautiful tomb,
contradictions in this country. Chinese dairy industry has all and it just epitomizes the
It's in a period of rapid change of those contradictions and more.
at all levels. The evolution of this industry
need to maintain a stable rural economy, and the development of this industry is impacted by is greatly influenced by the
managing a rapidly changing rural society. many of the challenges of
And ensuring the quality and safety of domestic milk
production is going to continue to be a challenge for the Chinese industry. And that industry, remember that
milk production graph went up and then fell off?
the Chinese consumers and the worldwide dairy community Those nucan be restored. around unless the confidence of both
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