China's Dairy Industry in 2023

China has solidified its status as a formidable force in the global dairy market, achieving an impressive annual milk production of 36 million tons. The country's sophisticated processing infrastructure boasts the capacity to handle approximately 60.18 million tons of milk annually, reflecting its commitment to maintaining high standards of quality and efficiency in dairy production.

Dairy Cattle Management

Significant strides in dairy cattle management have been made, particularly through innovations in genetic technology. The development of advanced genetic chips is a key initiative aimed at enhancing dairy cattle breeding, optimizing milk production, and improving disease resistance among cattle.

Milk Production and Processing

China's robust infrastructure supports the increasing consumer demand for high-quality dairy products. A notable regulatory development is the ban on using dried milk powder for drinking milk, ensuring compliance with both domestic and international standards.

Cheese and Milk Powder Production

The cheese production sector is expanding in response to rising consumer interest. While there is growth in whole milk powder production, exports of skimmed milk powder have decreased by 11%. In contrast, there has been a dramatic 225% increase in high-protein whey exports from the U.S. to China, highlighting shifting trade dynamics.

Key Enterprises

Notable companies like Junlebao Dairy Group Co., Ltd., Bright Dairy Holdings, Yili Group, and Mengniu Dairy play crucial roles in China's dairy industry. 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 are significant events in the sector.

Export and Import Dynamics

Despite a decline in skimmed milk powder exports, China's import dynamics remain strong, 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, indicating changing trade conditions.

Significant 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.

Market Dynamics and Challenges

The industry faces potential challenges such as overproduction and shifting consumer preferences. Strategic responses include forming alliances and boosting imports to address demographic changes. Additionally, exploring alternative dairy sources, such as sheep milk, is emerging as a trend.

Regulatory Developments

From September 19, 2025, 50 new national standards and amendments to existing regulations will take effect, impacting dairy exports from countries like Vietnam.

International Trade Relations

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

Chinese Dairy Imports

In April 2025, dairy imports reached 253,161 tons, marking a 4.2% increase from the previous year. From January to April 2025, imports rose by 8.9% year-over-year, with monetary terms growing by 19.6%.

Innovation in China's Dairy Sector

A decade of innovation is evident in China's dairy sector, driven by collaborations that foster global market growth. The development of genetic chips is transforming dairy cattle breeding, enhancing milk production and disease resistance. China's market is also a significant outlet for Russian dry dairy products. Danone reports exceptional growth in China, North Asia, and Oceania by 12.4% LFL. Oatly is re-evaluating its operations in China, considering changes to its asset ownership structure.

Mengniu's Efforts in Desert Transformation

Mengniu has successfully transformed over 200 square kilometers of desert into green pasture in China's Inner Mongolia, planting more than 97 million trees.

Yili Group's Global Reach

The Yili Group established the Yili Innovation Center Europe in 2014 to foster scientific collaboration in the dairy sector.

Cheese Cultural Industrial Park

A new cheese cultural industrial park in north China's Inner Mongolia autonomous region uniquely combines traditional dairy manufacturing and tourism. The Shoufang Xilingol Cheese Culture Industrial Park in Xilinhot city spans 59,000 square meters, with 40,000 square meters dedicated to production, processing, and visitor experiences. It is projected to generate an annual revenue exceeding 100 million yuan ($14 million) this year.

Key Market for Colombian Beef and Bovine Offal Exports

Colombian beef and bovine offal exports reached USD 89.5 million, significantly exceeding last year's figures, with China being one of the key markets.

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 blends tradition with modern innovations, contributing significantly to China's dairy production. Its focus on innovation and branding has led to a resurgence of traditional dairy products, capturing a significant share of China's dairy market.

Potential for Russian Dairy Producers

The Chinese market represents significant potential for Russian dairy producers. Despite the significant volume of milk production in China (40 million tons per year), the per capita consumption is only 42 kg. Demand for more complex dairy products, such as yogurts, kefirs, and cheeses, is only beginning to form, and their high cost currently limits consumption volumes.

Donkey Milk

Chinese markets highly value donkey milk as a medicinal food.

Ranks third in ice cream supply to Uzbekistan

China supplied 187 tons of ice cream to Uzbekistan.

China's Interest in Uruguay

China is looking towards Uruguay as a potential provider of whole milk powder, with negotiations underway for a potential zero-tariff agreement.

Modified: 2025/08/16