:. Food Industry News


Taiwan Dairy and Products Annual Report 2008

Source: US Government
17/11/2008

17 Nov, 2008 - Imports of most dairy products declined in 2007 and 2008 due to high international prices. In 2007, China made significant progress in exporting to Taiwan on several items but these products faced import suspensions following the crises surrounding melamine tainted dairy products beginning in September 2008, which also resulted in a new, temporary test report requirement for imports from all sources in three categories: milk powder, infant formula, and creamers.

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New Zealand was recently granted a waiver from the new melamine-free test report requirement after submitting safety and testing system documentation, with other supplier’s reportedly considering similar submissions to facilitate trade in the impacted categories.

New Zealand and Australia remain the key players in supplying dairy products to Taiwan. Owing to price and shelf-life constraints, U.S. fluid milk, milk powder and butter are not competitive and the market share is insignificant. U.S. dairy industry group’s marketing endeavors have focused on those products that are competitive in this market, like cheese, whey powder or lactose. U.S share of Taiwan’s cheese imports have been increasing.

Production

Taiwan’s tropical and sub-tropical climate is not the best environment for dairy production. Other than fresh fluid milk, Taiwan produces no dairy products (powdered milk, cheese, whey, etc.) in commercial quantities.

In 2007, a total of 322,349 mt of cow’s milk was produced from 597 registered dairy farms. Production levels in 2008 will remain around 2007 levels but is forecast to increase slightly in 2009. Taiwan’s goat milk production totaled 17,774 mt in 2007. Production levels are expected to continue to decline in 2008 and 2009.

Taiwan’s dairy farmers struggled to combat global price hikes on feed like their counterparts elsewhere in the livestock industry. To help mitigate the high cost of feed, in mid 2007, the Taiwan agricultural authorities helped raise the purchase prices for raw milk paid by processing plants to farmers, by NT$3/kg. These prices, NT$18.24/kg for winter season (December to March); NT$25.73/kg for the summer season (June to September); and NT$23.73/kg for the
warm season (April, May, October and November) remain unchanged in 2008. (Exchange rate was NT$32.85=US$1 in 2007; roughly NT$30.5=US$1 in the first 8 months of 2008.)

According to the Council of Agriculture (COA), one dairy cow generated NT$30,483 (US$928 equivalent) of income in 2007. This represents a 30 percent decline from 2006 levels largely due to the high cost of feed inputs. The high cost of feed caused some dairy operations to use inferior feed stock that resulted in lower milk output thus adding to the decline in income.

Also depressing income were lower prices paid for spent cows and young steer. Milk production tends to be highest during the cooler winter months (October through March) while consumption patterns for fresh milk run in reverse, peaking in the summer months.

The melamine-contamination scandal in China during the fall of 2008 is having major repercussions in Taiwan generating heavy media coverage and impacted policies regarding local milk production, demand and imports. Findings of low-level melamine contamination in various products including international brands caused Taiwan consumers to fear imports especially those sourced from China and boosted demand for domestic milk resulting in calls by the domestic industry to expand the scale of production. However, a major hurdle for expansion of local production is the dependency on imports for almost all inputs, seedstock, feed, etc.

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