China's Dairy Industry Overview

China is a formidable force in the global dairy industry, with an annual milk production of approximately 36 million tons. The country's processing capacity is equally noteworthy, with the ability to handle around 60.18 million tons of milk each year. This scale underscores China's dedication to quality and efficiency in its dairy sector.

Dairy Cattle Management

Significant strides in dairy cattle management have been achieved through advanced genetic technology. The use of sophisticated genetic chips has revolutionized milk production and improved disease resistance, enhancing both productivity and health standards in cattle management.

Milk Production and Processing

The expanding infrastructure in China supports a growing consumer demand for high-quality dairy products. Regulatory measures, such as the prohibition of dried milk powder in drinking milk, ensure product quality and safety, aligning with both domestic and international standards.

Cheese and Milk Powder Production

The cheese sector in China is rapidly expanding due to increasing consumer interest. While whole milk powder production is on the rise, there has been an 11% decline in skimmed milk powder exports. Conversely, high-protein whey exports from the U.S. to China have surged by 225%.

Key Enterprises

China's dairy industry is home to major players such as Junlebao Dairy Group Co., Ltd., Bright Dairy Holdings, Yili Group, and Mengniu Dairy. Notable developments include Junlebao's IPO, Bright Dairy's investments in Synlait, and Mengniu Dairy's designation as a "Lighthouse Factory" by the World Economic Forum.

Export and Import Dynamics

China's import dynamics remain robust, with projections reaching 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 grown by 6% in volume, driven by high-fat products like butter and cheese, with butter demand soaring by 72.6% and cream by 12.7%.

Market Dynamics and Challenges

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

Regulatory Developments

New regulatory changes are anticipated from September 19, 2025, with the introduction of 50 new national standards, affecting dairy exports from countries such as Vietnam.

International Trade Relations

Trade disputes impact Canadian farmers due to tariffs, while Arla Foods Ingredients is expanding its distribution in China through collaboration with Zhongbai Xingye Food Technology (Beijing) Co., Ltd.

Innovation in China's Dairy Sector

Innovation drives growth, with collaborations fostering global market expansion. The development of genetic chips is transforming dairy cattle breeding, enhancing milk production and disease resistance.

Special Market Events

Significant market events include Junlebao Dairy's stock offering, 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, significantly contributing 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, imports of Russian ice cream have decreased, with July deliveries totaling $194,300, marking the lowest volume in three months.

Regional Growth

The Asia-Pacific region, driven by countries such as China, is experiencing rapid growth due to increasing population and rising disposable incomes.

Enhancing China's Standing in Global Dairy Innovation

The National Center of Technology Innovation for Dairy (NCTID), led by Yili Group, made a prominent entrance at the 2025 IDF World Dairy Summit in Santiago, Chile. This debut highlighted China's growing influence in the global dairy industry, particularly in the realms of advanced dairy science and sustainability.

Key Market for Irish Dairy Products

China is a key target market for Irish dairy products. In 2024, Irish dairy exports to China were valued at €385.3 million, comprising 68,900 tonnes. China is set to achieve record imports of cheese and butter in 2025 despite economic challenges.

Increased Demand for Key Dairy Products

The USDA predicts increased demand for key dairy products like whole milk powder and cheese.

Trade Agreements

Mainland China has finalized agreements with Hong Kong to facilitate the export of dairy and meat products. The agreements are part of the cooperation between the Environment and Ecology Bureau of Hong Kong and the General Administration of Customs of the People's Republic of China (GACC).

Modified: 2025/11/03