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Abstract

China’s emergence as a major importer of dairy products corresponds to rapid increases in its domestic milk prices. Allocating growth in China’s milk prices from 2006 to 2014 to production cost categories shows that feed concentrates and fodder account for about half of the price increases. While labor productivity grew rapidly, there was only moderate growth in milk per cow and no improvement in milk output per unit of feed. Scarcity of feed resources, particularly forage, is likely to constrain growth of China’s milk production and maintain the country’s demand for dairy imports.

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