Yili Industrial Group, China's second-largest dairy producer by revenue, signed an agreement on the launch of the largest dairy farm in the United States with strategic partner Dairy Farmers of America on Wednesday in Inner Mongolia.

The joint venture milk powder factory in Kansas is expected to have output of 80,000 metric tons. The factory will supply China and other countries.

Yili and DFA signed a strategic partnership in early July 2013.

"Farm management, dairy production and inspection standards have reached a high level in China, with Yili having impressed us most," said Rick Smith, chief executive officer of the DFA.

The DFA, based in Kansas City, Missouri, has more than 20,000 farms in 49 US states. It is also an important partner with other food and beverage giants, buying raw milk from its members and selling milk and related products to wholesale buyers.

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