Overview of China's Dairy Industry

China stands as a formidable player in the global dairy market, marked by an impressive annual milk production of 36 million tons. The nation's processing infrastructure is capable of handling approximately 60.18 million tons of milk each year, underscoring its commitment to high standards of quality and efficiency in dairy production.

Dairy Cattle Management

Significant advancements in genetic technology have greatly enhanced dairy cattle breeding, optimizing milk production and improving disease resistance. The development of advanced genetic chips marks a transformative phase in the industry, further boosting productivity and health standards.

Milk Production and Processing

China's robust infrastructure supports the increasing consumer demand for high-quality dairy products. The ban on using dried milk powder for drinking milk highlights China's adherence to both domestic and international standards.

Cheese and Milk Powder Production

The cheese production sector is expanding rapidly due to rising consumer interest. Although whole milk powder production is on the rise, exports of skimmed milk powder have decreased by 11%. In contrast, high-protein whey exports from the U.S. to China have dramatically increased by 225%.

Key Enterprises

Prominent companies such as Junlebao Dairy Group Co., Ltd., Bright Dairy Holdings, Yili Group, and Mengniu Dairy are crucial players in China's dairy industry. Notable milestones 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 surging by 72.6% and cream by 12.7%.

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. Alternative dairy sources, such as sheep milk, are emerging as a trend.

Regulatory Developments

Forthcoming regulatory changes from September 19, 2025, will introduce 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

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.

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 blends tradition with modern innovations, contributing significantly to China's dairy production.

Potential for Russian Dairy Producers

The Chinese market represents significant potential for Russian dairy producers, with a growing demand for more 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 decline, 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, positioning it as a key player in the global dairy market. 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. The Asia-Pacific region, including China, shows the fastest growth due to increasing dairy consumption. Home to Yili and Mengniu, major players in the dairy industry, Yili ranks with a turnover of €14.3 billion, and Mengniu with €11.2 billion.

Modified: 2025/09/14