USDEC: China's Dairy Demand Dips as Economic Pressures Weigh, Though Whey Shows Promise
Source: The DairyNews
While U.S. dairy exports experienced gains globally in April, China's demand for American dairy products continued to wane. In April alone, exports to China dropped by 12%, totaling 31,357 metric tons in milk solids equivalent. This marks the thirteenth consecutive month of declining exports to China, though daily averages for April were the highest of 2024.
The significant drop in exports to China was largely driven by steep declines in several key products. Lactose exports plummeted by 33%, and shipments of nonfat dry milk/skim milk powder (NFDM/SMP) fell by 68%. Fluid milk and cheese exports also saw declines of 36% and 23% respectively.
Despite positive economic performance in the first quarter of the year, China continues to face economic pressures, particularly in the real estate sector, which has struggled to recover even with supportive policy changes. This ongoing economic uncertainty has suppressed consumer confidence, adversely affecting dairy demand.
However, there were notable exceptions to the overall downward trend. Whey exports, particularly high-protein WPC80+, surged by 182%, and low-protein whey saw a 5% increase—the first since January 2023. This growth, driven by a 42% rise in dry whey exports, indicates a potential recovery in China's pork sector, which is a major consumer of whey.
Recent increases in Chinese piglet prices, due to production cutbacks, have begun to alleviate some of the financial pressures on pork producers, which could signal a growing demand for whey in the coming months. Nonetheless, structural adjustments, such as the government's recent reduction in breeding sow targets, may continue to moderate whey demand within the pork industry.
Despite positive economic performance in the first quarter of the year, China continues to face economic pressures, particularly in the real estate sector, which has struggled to recover even with supportive policy changes. This ongoing economic uncertainty has suppressed consumer confidence, adversely affecting dairy demand.
However, there were notable exceptions to the overall downward trend. Whey exports, particularly high-protein WPC80+, surged by 182%, and low-protein whey saw a 5% increase—the first since January 2023. This growth, driven by a 42% rise in dry whey exports, indicates a potential recovery in China's pork sector, which is a major consumer of whey.
Recent increases in Chinese piglet prices, due to production cutbacks, have begun to alleviate some of the financial pressures on pork producers, which could signal a growing demand for whey in the coming months. Nonetheless, structural adjustments, such as the government's recent reduction in breeding sow targets, may continue to moderate whey demand within the pork industry.