China's path to food security is taking a big swing to the south. In fact, 8500km down to Tasmania, the dairy-hungry nation's newest source of fresh milk.
Early next year, businessman Lu Xianfeng plans to begin flying fresh milk to his home city of Ningbo, in eastern China, from the island state where he owns Australia's largest dairy operation.
Lu's Moon Lake Investments bought the 191-year-old Van Diemen's Land Company for A$280 million ($298m) in March, giving him access to 25 dairy farms and enough milk to fill an Olympic-sized swimming pool every nine days.
A share of that will be flown to Ningbo every week, Sean Shwe, Moon Lake's managing director, told reporters in Hobart, from where the China-bound bulk deliveries will depart.
While countries as far away as the Czech Republic and Chile sell milk to China, Moon Lake is counting on gaining an edge with milk from Tasmania's far northwest coast which, it says, boasts "the cleanest air in the world."
The volume of milk shipments to the world's most populous nation has jumped an average of 126 per cent a year since 2010, creating a US$333m ($461m) market dominated by the European Union, according to Chinese customs data.
Chinese consumers, ruffled by past food scandals, see imported milk as a safer alternative to domestic supplies, the US Department of Agriculture said in May.
Moon Lake has already forward-sold more than 15m yuan ($3m) of the milk from its Van Diemen's Land dairies, which it calls VDL Farms.
"This is an exciting venture for our company, VDL Farms, and potentially for all Tasmanian producers of fresh, perishable produce such as seafood, fruit and vegetables," says Shwe.
About 10m litres of milk a year from VDL dairies will be trucked to Hobart for processing by Lion Dairy and packaged under the "VAN Milk" brand, a nod to the dairy operation's ties to Van Diemen's Land Company.
Moon Lake is in advanced talks with airlines and airports to begin weekly round trips from Hobart to Ningbo starting in the first quarter of next year, with a view to increasing the frequency to two or three three times a week in a year, and adding Beijing as a destination, the company says.
The new air freight route will mark the return of international departures from Hobart International Airport after a regular passenger service to Christchurch was cancelled in the 1980s.
We have some of the best and finest produce in the world that growing, massive markets like China want to get more of.
Initially, fresh milk will be sold in 1-litre and 600ml cartons, with plans to add yogurt and other dairy products, Moon Lake says.
"It is great for VDL and the Northwest Coast community as it moves the farms from ones that previously just produced milk and watched it leave through the farm gate, to ones that now produce a high quality, value-added export product, giving them more security and certainty about prices," Shwe says.
The milk exports will be a boost for Tasmania, Australia's smallest and least-populated state, where an unemployment rate of 6.5 per cent lags the national rate of 5.6 per cent, and its citizens are more dependent on welfare than in any other state.
"Tasmania is now a destination that investors want to be a part of," the state's Premier Will Hodgman told reporters.
"We have some of the best and finest produce in the world that growing, massive markets like China want to get more of."
Moon Lake is aiming for the premium end of the market, with the milk to sell for between A$10 and A$15 a litre
"VAN Milk" will represent the first sale to China of Tasmanian milk by a wholly-owned Chinese company.
Having direct stakes in food-producing companies gives Chinese firms an advantage over Australian competitors when it comes to selling into China, says Michael Harvey, a senior dairy analyst with Rabobank International in Melbourne.
"The advantage is being able to navigate some of the complexities in the market," he says.
Milk from Down Under "is held in high regard, so there is a strategic priority in China to source the product from Australia," he says.
After Germany, Australia is China's biggest supplier of liquid milk, including UHT products, shipping 61,184 tonnes of the product, worth A$62m, last year, Chinese customs data shows.
China's own dairy farms are located mostly in the country's central and northern areas, where the climate is more suitable for raising cattle, the USDA said in a report in May.
However weak cold chain logistics have made it difficult to ensure the milk's freshness when it reaches major markets in northeastern and southern China, the US agency said.
On top of that, the discovery of contaminants from melamine to mercury have made Chinese consumers wary of the local product.
That has slowed the increase in milk consumption in China, which averages about 33kg per person a year - less than a third of the global average, according to the USDA, which said in May that "milk consumption has plenty of growth potential".
Moon Lake says it plans to increase milk production at its VDL Farms by 80 per cent within five years. VDL currently produces 7.66m kilograms of milk solids a year from about 30,000 cows, which graze on 7000ha.
Once the VAN Milk brand is established in Ningbo and Beijing, Moon Lake wants to take it to Shanghai, Hangzhou and other Chinese cities.
Moon Lake's owner Lu, 46, is also executive chairman and the largest shareholder of Ningbo Xianfeng New Material, a maker of sunscreen fabrics and shades.
"We've chosen Beijing and Ningbo for the initial marketing push because Ningbo is Mr Lu's home town and he has established networks to sell the product," Shwe says.
"Also, the city has among China's highest average incomes and is less saturated with western products than, say, Shanghai."
Still, selling milk to China isn't without risks. This year, Chinese regulators told Australia Dairy Farmers Group that it needed to revalidate its product shelf-life and supply-chain processes, effectively freezing sales there for at least two months, Chairman Michael Hackett says.
"Investors think somehow you find a pot of gold in dealing with China," he says. "They're not bad margins, but there's a lot of extra work involved to get them."
Hackett's advice is to get as close to the consumer as possible, "so you're not dealing with an importer, who then has a distributor, who then has a retail group."
Japan: Robots take over the milking shed
Jin Kawaguchiya gave up a career in finance to help revive Japan's ailing dairy industry - one robot at a time.
In a country that relies increasingly on imported foods like cheese and butter, Japan's milk output tumbled over two decades, touching a 30-year low in 2014.
Costs rose faster than prices as the economy stagnated, eroding profit, and ageing farmers quit the business because they couldn't find enough young people willing to take on the hard labour of tending to cows every day.
But technology is altering that. On the northern island of Hokkaido, Japan's top dairy-producing region, Kawaguchiya transformed the 20-cow farm he inherited from his father-in-law 16 years ago into Asia's largest automated milking factory.
Robots milk 360 cows three times a day and make sure the animals are fed and healthy.
The machines even gather up manure and deposit it in a furnace that generates electricity.
"Without robots, I would have to hire as many as 15 part-time workers to take care of cows," says Kawaguchiya, 44. "I can save 15 million yen ($200,800) a year thanks to them."
Kawaguchiya had no experience in farming before taking over the farm from his father-in-law, whose three daughters weren't interested in running a milking operation that required them to manually attach milking cups to each cow.
Kawaguchiya says he quit a job as a manager in Tokyo for Shoko Fund & Co., a business lender, because he saw an opportunity to make a better living in agriculture, if he could change the economics.
To add scale, he merged the farm with four nearby dairies to create Kalm Kakuyama, a company that now has 610 animals, including 380 cows purchased last year. About 250 are calves or pregnant females which aren't producing milk for the dairy.
Automation has transformed the business. After investing 1.5 billion yen to install the robots and the 150 kilowatt per hour generator last year, Kawaguchiya says his raw milk production will quadruple this year from 2015, to 4500 tonnes, and reach 5600 tonnes next year, almost 10 times the output of the average dairy farm in Japan.
He's now the largest producer in western Hokkaido. With less time spent on manual labour, he can analyse data on milk output, quality and animal health to be more efficient.
Kawaguchiya isn't alone. The island has more than 100 milking robots, according to Shinichi Otsuka, the head of the agricultural technology department at the Hokkaido prefecture government.
With bigger and more efficient dairy farms emerging in Hokkaido, raw milk output is recovering. In the first half of this year.
Production in Japan rose 1.1 per cent from a year earlier to 3.78 million tonnes, heading for a second annual gain since touching 7.33 million tonnes in 2014, the lowest since 1984, according to the Agriculture Ministry.
While the number of dairies continues to drop, the ones that remain are getting bigger and productivity per cow is increasing, the data show.
"So-called mega farms are emerging in Hokkaido, increasing their presence in the Japanese dairy industry," says Koichiro Omoto, head of the information planning department of Japan Finance, a government-affiliated lender that boosted loans to dairy farms by 17 per cent in the year through March.
Use of robots may spread faster in Japan than other countries because the industry - populated mostly with small family farms and ageing owners - is faced with a labour shortage and needs to get more efficient, says Yoko Takeda, chief economist at Mitsubishi Research Institute in Tokyo.
The number of dairy farms has plunged 28 per cent in the past eight years to about 18,000, Agriculture Ministry data shows. Farmers in Japan are also getting older, with the average age last year at 67, compared with 63.2 in 2005.
"Young people are reluctant to take over their parents' farms as they cannot see a bright future," Kawaguchiya says. "Their earnings are very small compared with other jobs."
More investment in information technology is a key to enhancing productivity in agriculture, according to Yuji Yamamoto, selected by Prime Minister Shinzo Abe as Agriculture Minister when he reshuffled his cabinet in August.
Japan can sometimes face shortages of dairy products, with the country needing to import an additional 4000 tonnes of butter to meet demand.
The government began subsidies for milking robots last year after signing the Trans-Pacific Partnership trade deal, which would mean cheaper dairy imports and more competition for domestic producers.
The financial support expanded 12 per cent this fiscal year to 68.5b yen, says the Agriculture Ministry.
Kalm Kakuyama took advantage of borrowing costs near zero per cent to buy its robots.
Without robots, I would have to hire as many as 15 part-time workers to take care of cows.
Money is cheap because the Bank of Japan is seeking to revive the stagnant economy with record monetary stimulus.
More investment is good news for makers of milking robots, including DeLaval of Sweden, Lely Industries of the Netherlands and GEA Farm Technologies of Germany.
Sales of milking robots in Japan will jump 67 per cent this year from last year, after doubling in 2015, says Satoshi Shinya, director at the Tokyo office of DeLaval, which provides robots and related service to Kawaguchiya's farm.
The use of robotic systems may reach 30 per cent of all dairy farms in Japan, compared with 2 per cent now, he says.
"Sales are expanding as the government shoulders half of costs to introduce robots, and farms have difficulty finding cheap labour," Shinya says.
"As local dairy farms are under pressure from TPP, the government is boosting subsidy payments for them, which is positive for us."
One robot can handle as many as 60 cows and produce 3 tonnes of milk a day. The traffic is managed by the machine, which uses cameras to identify each cow, find the teats and disinfect them before milking, a process that can take less than 10 minutes.
The operation at Kalm Kakuyama is attracting visitors from as far away as Indonesia, keen to revive farms struggling with low profitability and high costs.
Kawaguchiya says the business has been so successful that it has brightened his outlook for the future. He hopes to expand into cattle breeding, feed sales and tourism, and he may acquire or manage operations of retiring farmers.
"We want our company to be a core of economic activities in this community," Kawaguchiya says.
"Then we can find successors, either from our family members or outside."