Down on the farm: Achieving self-sufficiency and raising standards for milk production

Dairy farming has long been recognised as a key part of the nation’s agricultural economy, and as a result, moves are now under way to bring the segment back up to international standards. A keen eye is being kept on trends in Asia’s dairy market, with likely future growth in consumption making the segment a potentially strong exporter for Mongolia, if it can find the right formula to meet present challenges.

The sector has been largely in recovery since the early 1990s from the effects of the first privatisation drive. Prior to this time, Mongolia had been self-sufficient in milk, with dairy farms producing some 54.4m litres annually at locations around urban centres such as Ulaanbaatar, Erdenet and Darkhan – the three points of the livestock “Golden Triangle”, so-called because of its good pasture land. The fragmentation of farms that then occurred under privatisation, and the resumption of semi-nomadic herding by many Mongolians, disrupted this previously integrated sector, however.

GOT MILK: Nonetheless, total milk production gradually increased during the late 1990s, reaching around 467m litres in 1999, before a series of dzuds ( extremely bad winters) reduced this by nearly half in the years 2000-03. In 2001, for example, total production dropped to 290m litres. In 2004 production jumped up again to 406.3m litres, while UN Food and Agriculture Organisation (FAO) figures for 2009 show 325.5m litres for cow’s milk, 76.69m litres for goat’s milk and 37.07m litres for sheep’s milk, a total of 439.26m litres. Milk production continues to be popular among herders, many of whom depend on selling milk for a major part of their livelihood – a factor that also ties the dairy industry’s fortunes to efforts to combat rural poverty.

YIELDS: Mongolian cattle are known for their rugged qualities, which enable them to survive in harsh conditions. Size and milk yield tends to be low, however. A cow that is raised traditionally produces some 500-600 kg of milk during a five-month lactating season, with May-September the usual breeding months. Much of the country’s milk is produced through traditional methods, with the absence or low quality of transport and processing infrastructure meaning that a large proportion of what is produced stays off the market and is used by rural communities. The Khaan Yembuu Company, located 120 km north of Ulaanbaatar, began operations in 2009 and has a daily production capacity of 5-10 tonnes. The plant produces fresh dairy products. including milk, yoghurt, butter and cream. However, a 2009 UN Development Programme (UNDP) report estimated that only 2-3% of the milk produced was processed industrially.

Dairy farmers find it difficult to move their products to urban centres due to a lack of refrigeration, storage, processing and distribution networks. This has produced the seemingly contradictory scenario in which Mongolia is both self-sufficient in milk yet imports increasing amounts of it for use in urban areas. The UNDP estimated in 2009 that imports of processed milk accounted for around 15% of domestic demand, costing some $3m a year. Some of what is imported is also milk powder, which is then reconstituted.

TRUE SELF-SUFFICIENCY: In 2005 the FAO and the Mongolian and Japanese governments launched a project aimed at addressing these issues, looking at each link in the cow-to-consumer chain. This provided a good model for future, industry-wide initiatives. In 2006 the government launched its National Dairy Programme, which concentrated on increasing production, enhancing milk marketing, and developing human resources through training and capacity building. Dairy also became an important part of the National Food Security Programme of 2009-16, with a major investment in rural infrastructure, veterinary services and mechanisation incentives (see overview).

Getting dairy products more rapidly and safely to market still requires a much-improved infrastructure. Nevertheless, as Mongolia’s GDP rises, and with the government determined to boost the agricultural sector and transportation infrastructure, the future could be a most nutritious one for the country’s dairy industry.