Overview of China's Dairy Industry in 2023

China continues to assert its influence on the global dairy market, with an estimated annual milk production of around 36 million tons. This positions the country as a critical contributor to the global dairy supply chain. Its sophisticated processing infrastructure is capable of managing approximately 60.18 million tons of milk annually, highlighting its capacity for high-volume operations and commitment to quality and efficiency.

Dairy Cattle Management

While specific numbers for dairy cattle are not provided, China has made significant strides in dairy cattle management. These advancements are part of ongoing reforms aimed at enhancing efficiency and productivity, ensuring the production of high-quality milk.

Milk Production and Processing

China's robust infrastructure supports growing consumer demand for dairy products. The country's focus on high-volume operations emphasizes the importance of quality and efficiency in milk processing.

Cheese and Milk Powder Production

The cheese production sector in China is experiencing growth, driven by increasing consumer demand. While specific figures are not detailed, there is a notable rise in whole milk powder production. Conversely, exports of skimmed milk powder have decreased by 11%. A significant 225% increase in high-protein whey exports from the U.S. to China indicates a growing demand for dairy protein.

Key Enterprises

• Junlebao Dairy Group Co., Ltd.: Known for its IPO and expansion efforts.
• Bright Dairy Holdings: Recognized for significant investments in Synlait.
• Yili Group: A formidable force within China's dairy industry.
• Mengniu Dairy: A leading national player.

Export and Import Dynamics

Despite a decrease in the export of skimmed milk powder, China's imports remain strong to meet the high domestic demand, projected to reach up to 17.18 million tons. This trend reflects evolving trade conditions and consumer preferences within the market.

Significant Market Events

• Junlebao Dairy's Stock Offer: Reflects market strength and investor confidence.
• Bright Dairy's Strategic Alliance: Financial collaboration with Synlait.
• Global Market Impact: China's demand significantly influences markets such as Poland.
• UHT Milk Projections: Expected valuation of USD 15.2 billion by 2034 with a CAGR of 6.5%.
• Mengniu's Ningxia Facility: Recognized as a "Lighthouse Factory" by the World Economic Forum.
• Tariff Discussions: Potential shifts affecting international trade with the U.S.

Market Dynamics and Challenges

China's dairy sector faces challenges such as potential overproduction and changing consumer preferences. Strategic adaptations include alliances and imports to navigate demographic shifts, driven by decreasing birth rates. Partnerships like Maui Milk and Mengniu are exploring demand for alternative dairy sources such as sheep milk. Despite tariff tensions, impacts on butterfat exports are limited due to minimal volumes. The country's focus on quality is further emphasized by technological advances and new standards banning dried milk powder for drinking milk.

Regulatory Developments

The National Commission of the People's Republic of China has introduced 50 new national standards for food products and 9 amendments to existing regulations, effective from September 19, 2025.

International Trade Relations

Trade disputes have affected Canadian farmers due to tariffs imposed by China on Canadian exports such as canola meal, oil, peas, pork, and seafood. Arla Foods Ingredients, in partnership with Zhongbai Xingye Food Technology (Beijing) Co., Ltd., serves the Chinese market, distributing Arla's products across the country. Consumers in China perceive dairy products as healthier and more premium. Richard Allen, Fonterra's President of Global Ingredients, noted that consumers in China are contributing to the rising global demand for dairy products like butter and cream. Over 300 million packs have been sold in China since 2023, thanks to a new packaging solution from SIG extending its innovation from the single-serve market. The expanding Chinese market for "yellow oil" butter. Fonterra is capitalizing on the growing Chinese demand for dairy products and introduced a new commercial cooking cream tailored for the mid-tier commercial baking sector. China invests in logistics to secure cheap grain. COFCO is pursuing far more than logistical efficiency: it aims to solidify China’s direct control over key food supply chains. China has also announced a temporary reduction in its import tariffs on foreign dairy products, from 125% to 10%.

China significantly increased its imports of oilcakes and meal from Russia. In the first four months of 2025, China imported 315,000 tons of oilcakes and meal from Russia, amounting to $96 million. Compared to the same period in 2024, the volume grew 2.8 times and the value 2.2 times.

Competition from suppliers from China. Russian manufacturers face serious competition from suppliers from China.

Chinese dairy imports rise for the sixth consecutive month. April marks the sixth consecutive month of rising Chinese dairy imports, reflecting sustained demand despite a slowing growth rate. April saw China's dairy imports reaching 253,161 tons, a 4.2% increase from the 242,933 tons recorded in April 2024. This marks the sixth consecutive month of increased imports, maintaining a steady upward trajectory despite a moderation in growth percentage. Key products contributing to this volume include whole milk powder, which saw a 2.3% rise. From January to April 2025, dairy imports cumulatively rose by 8.9% year-over-year. In monetary terms, the imports grew by 19.6% in the same period. The average price per ton rose from $4,033 to $4,428, signaling a 10% increase in price. The main products by volume were whey, whole milk powder, and skimmed milk powder.

Modified: 2025/05/18