China's Dairy Industry Overview

China has solidified its position as a key player in the global dairy market, producing approximately 36 million tons of milk each year. The country's processing infrastructure is robust, with the capability to handle around 60.18 million tons annually, demonstrating China's dedication to quality and efficiency in dairy production.

Dairy Cattle Management

China has made significant advancements in genetic technology, enhancing dairy cattle breeding. The development of advanced genetic chips has optimized milk production and improved disease resistance, significantly boosting productivity and health standards in cattle management.

Milk Production and Processing

The country's strong infrastructure supports the rising consumer demand for high-quality dairy products. China has banned the use of dried milk powder for drinking milk, underscoring its compliance with domestic and international standards.

Cheese and Milk Powder Production

The cheese production sector in China is rapidly expanding due to growing consumer interest. Whole milk powder production is increasing, while exports of skimmed milk powder have decreased by 11%. Conversely, high-protein whey exports from the U.S. to China have surged by 225%.

Key Enterprises

Prominent companies such as Junlebao Dairy Group Co., Ltd., Bright Dairy Holdings, Yili Group, and Mengniu Dairy are pivotal in China's dairy industry. Notable developments include Junlebao's IPO and expansion, Bright Dairy's investments in Synlait, and Mengniu Dairy's recognition as a "Lighthouse Factory" by the World Economic Forum.

Export and Import Dynamics

Despite a decline in skimmed milk powder exports, China's import dynamics remain robust, with imports projected to reach up to 17.18 million tons. The average import price per ton has increased by 10%, from $4,033 to $4,428. Dairy imports have risen by 6% in volume, driven by high-fat products such as butter and cheese, with butter demand increasing by 72.6% and cream by 12.7%.

Market Dynamics and Challenges

The industry faces challenges like overproduction and shifting consumer preferences. Strategic responses include forming alliances and boosting imports to address demographic changes. Alternative dairy sources, such as sheep milk, are emerging trends.

Regulatory Developments

New regulatory changes are expected from September 19, 2025, introducing 50 new national standards and amendments to existing regulations, impacting dairy exports from countries like Vietnam.

International Trade Relations

Trade disputes have affected Canadian farmers due to tariffs. Arla Foods Ingredients is distributing across China in collaboration with Zhongbai Xingye Food Technology (Beijing) Co., Ltd.

Innovation in China's Dairy Sector

Innovation has been a driving force in China's dairy sector over the past decade, fueled by collaborations that foster global market growth. The development of genetic chips is transforming dairy cattle breeding by enhancing milk production and disease resistance.

Special Market Events

Key market events include Junlebao Dairy's stock offer, Bright Dairy's strategic alliance with Synlait, and the projected valuation of the UHT milk market at USD 15.2 billion by 2034.

Inner Mongolia's Contribution

Inner Mongolia's dairy output exceeded 7.76 million tonnes in 2024, capturing 19% of China's total production. The region combines tradition with modern innovations, contributing significantly to China's dairy production.

Potential for Russian Dairy Producers

The Chinese market holds significant potential for Russian dairy producers, with growing demand for complex dairy products like yogurts and cheeses. However, China's imports of Russian ice cream significantly decreased in July, totaling $194,300, marking the lowest volume in three months. Despite this, total cumulative deliveries of Russian ice cream to China from January to July remained almost unchanged at $2.1 million.

Conclusion

China's dairy industry is marked by significant production capabilities, innovative management practices, and strategic international relations. The country has maintained stable import volumes, increasing purchases from New Zealand by 6% while importing less from the Northern Hemisphere. China's Mengniu Dairy Company Limited has announced significant changes in its executive leadership, expected to bring fresh perspectives to strategic and financial management. Chinese dairy giant Yili has once again secured its position as the world’s most valuable dairy brand, reflecting its resilience and strategic focus on innovation, product quality, and consumer trust. High-ranking Chinese officials have also expressed interest in purchasing Belarusian butter at world prices. Rising consumption of dairy products is evident as China experiences increased consumption of milk, cheese, yogurt, and other dairy products. China's strong demand continues to bolster global dairy trade.

Modified: 2025/10/04