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China's Dairy Industry Overview - 2023

China has established itself as a vital participant in the global dairy market, focusing on enhancing its domestic market efficiency and influencing worldwide dairy commerce significantly.

Key Statistics

• Number of Dairy Cattle: Exact figures are undisclosed due to ongoing agricultural reforms, but there is a significant focus on improving cattle management practices.
• Milk Production Volume: Approximately 36 million tons annually, highlighting China's critical role in global milk production.
• Milk Processing Volume: Estimated at 60.18 million tons per year, showcasing the country's ability to effectively process large dairy volumes.
• Cheese Production Volume: On an upward trend, though precise numbers remain unspecified.
• Milk Powder and Whey Production: Despite an 11.0% decline in the export of skimmed milk powder, whole milk powder production is on an upward trend.

Key Enterprises

• Junlebao Dairy Group Co., Ltd.: Notable for its impactful IPO and strategic market moves, signifying its industry dominance.
• Bright Dairy Holdings: Renowned for key financial interventions with Synlait.
• Yili Group: Recognized as a powerful market influencer in China.
• Mengniu Dairy: A leading entity in China's dairy sector.

Export and Import of Dairy Products

In 2023, China observed an 11.0% decrease in the export of skimmed milk powder. However, imports of high-quality dairy products, amounting to 17.18 million tons of milk, addressed specific domestic demands.

Significant Events

• Junlebao Dairy's Public Stock Offering: Demonstrates industry dominance.
• Bright Dairy's Financial Support: Uplifted Synlait.
• Measures to Stabilize Dairy and Beef Outputs: Implemented as a strategy to manage supply and pricing.
• Chinese Demand's Influence: Affected global markets, specifically impacting regions like Poland.
• UHT Milk Market Projections: Expected to reach USD 15.2 billion by 2034 with a CAGR of 6.5%.
• Proposed Updates: National food safety standards for sterilized milk are being updated.
• Trade Relations: Strengthened through the Forum on China-Africa Cooperation (FOCAC).
• Mengniu's Ningxia Facility: Gained 'Lighthouse factory' status from the World Economic Forum.
• Domestic Milk Powder Production: Meets 60% of domestic demand.
• U.S. Dairy Exports: Declined by 13% to China by September 2023.
• Tariff Negotiations: Potential U.S. tariff negotiations could affect pharmaceutical exports.
• National Dairy Innovation Center: Initiated for innovative dairy solutions.
• High-Protein Whey Exports: U.S. exports of WPC80+ soared by 225% year-over-year.
• Russian Ice Cream Imports: Increased by 1.4 times, valued at $2.7 million.

Market Dynamics

China's dairy sector faces overproduction challenges, shifting consumer preferences, and complex international trade relations. Companies like China Youran Dairy Group Limited show sectorial growth as China remains a major importer of Russian dairy products, adapting its trade strategies accordingly. Despite challenges in local milk pricing, firms such as Danone and Yakult Honsha Co. are focused on sustainable growth. The completion of two Five-Year Plans underscores the dairy sector's importance.

The impacts of China's dairy industry on the global market are profound, with adjustments anticipated due to market shifts. Forecasts suggest a 2.6% year-on-year reduction in milk production by 2025, a departure from global trends. The market dynamics have been influenced by U.S. tariffs, with China responding by introducing its own set of import levies. Furthermore, restrictions on the import of German milk and dairy products have been lifted following negotiations to address a foot-and-mouth disease outbreak. The country is also reacting to tariffs introduced by the United States.

China has seen more modest decreases in dairy production costs, reflecting the ongoing efforts to stabilize and grow its dairy industry.

Modified: 2025/03/10