Study On Structure,Conduct And Performance Of Dairy Industry In Xinjiang

Dairy industry is an organic system, composed of the elements, such as dairy farmers, buyers of raw milk, processing enterprises for dairy products, dairy consumers, governments and trade associations. There is a very close economic connection among them, but there is some conflict of interest due to it is as an independent stakeholder.Based on the relevant theory, such as industrial organization, information economics, new institutional economics and industrial chain and so on, this paper gives an objective description for three key links, including production of raw milk, dairy processing and dairy consumption, in relation to the development status of dairy industry in Xinjiang of China, using the research methods, such as the analytical methods of industrial organization (structure - conduct - performance analysis of SCP paradigm), econometrics, game theory and questionnaire, etc. This paper conducts a system analysis on the consumption structure of the dairy, market structure of dairy manufacturing industry, production structure of raw milk and their respective operational performance, carries out an analysis and evaluation for the main factors effecting the performance, conducts an in-depth study on the consumer conduct for dairy products, market conduct of dairy manufacturing, especially the vertical organizational relationships to dairy industry chain and competitive conduct between the various stakeholders, in order to try to reveal accurately the inherent law and trends of dairy industry development in Xinjiang, explore the effective ways regulating conduct of each stakeholder, put forward some suggestions contributing to dairy industry development in Xinjiang to promote the sustained and healthy development of dairy industry in Xinjiang. The main conclusions of this paper are as follows:(1)Xinjiang is China's major production base of raw milk, with a comparative cost advantage in dairy farming. The main mode of production of raw milk is free-range farmers, dairy yield is lower than the national average, while the low percentage of fine dairy cows is the most important factor to affect yield per unit from dairy cows; the non-equilibrium of feeding for dairy cows in the geographical distribution has led to the regional imbalance in the layout of production of raw milk and dairy processing enterprises.(2)The concentration of dairy manufacturing industry in Xinjiang is low, its overall level is just over the competition-based market structure, but it presents an oligopoly market structure in local market, namely, dominated by one or two companies. With the existence of barriers, such as milk source, effect of economies of scale, the industry's entry barriers are gradually raised and the new enterprises will be increasingly difficult to enter.(3)Under the combined action of market structure and ownership structure, the operating performance of dairy industry in Xinjiang has been improved, the market concentration is a greater impact on performance than sales growth, but the profitability of dairy manufacturing industries is lower than the average of all industries; dairy industry is mainly relying on expanding the extension of the scale of production-oriented enterprises, phenomenon of homogeneous products is serious; the technical efficiency of dairy companies in Xinjiang is significantly lower than the national average.(4)At present, the technological innovation capability of dairy enterprises in Xinjiang is not strong, companies more often focus on the cultivation of consumer brand loyalty and the contend for market share; the price competition and the non-price competitive behaviors such as advertising, mergers and acquisitions, have accelerated survival of the fittest for dairy products industry, are conducive to form a relatively stable and new industrial organizational structure, which is led by oligarchy, and being coexisted medium and small enterprises.(5)There is a tradition of dairy consumption in Xinjiang, but the overall level of consumption is not high. There is a consumptive imbalance between urban and rural areas, northern and southern Xinjiang; there is a clear propensity to consume by consumers to choose dairy products, a difference between consumers with different gender, age, nationality, occupation and education level; both of income level and consumption habits are the most important and most direct factors to affect the consumption of dairy products.(6)There is four kinds of patterns of vertical-type organization relations in the development of dairy industry in Xinjiang, that is, the driven type of leading enterprises, linkage-based intermediary organizations, integration type of quasi-cooperatives driven by leading enterprises, and full integration type. At present, the principal means of production for raw milk in Xinjiang include the scattered feeding, decentralized milking and the acquisition of raw milk from milk stations, most dairy processing enterprises adopt two or more modes of supply of milk, milk supply is not stable.(7)Cooperative integration is an ideal mode in the development of dairy industry chain. From the perspective of system design, the best vertical organization mode for dairy industry chain is from the establishment of vertical organizational relationships of " the enterprise shared by cooperatives + cooperatives composed by farmers + farmers" to vertical organizational relationships of cooperation integration; from the process of system evolution, the traditional free-range model by farmers should be accelerate to change, the model of"company + ranch"should be energetically developed, and the ideal model, which is the cooperative integration and agribusiness should be encouraged and promoted.