Demand for dairy has been falling in China for some time as the country tries to meet more of its demand internally, but a push to become self-sufficient is only part of the story, according to Betty Berning, analyst with the Daily Dairy Report.
“Ongoing economic headwinds, including those related to real estate and weak consumer spending, are contributing factors to decreased dairy consumption in China,” Berning said. “Moving forward, China’s dairy demand may not be as promising as once expected. The increased herd, coupled with slowed demand against a backdrop of declining population, could limit export opportunities.”
That said, a push by 23 local governments in China to increase birthrates could spark a baby boom, resulting in millions of young Chinese who would likely grow up on a daily diet of dairy products, beginning with infant formula and graduating to other complete protein products, she said.
Local governments are offering cash incentives in the form of one-time bonuses or annual stipends that last up to 10 years per child. While some of the incentives are offered to first time parents, many of the most lucrative offers are being made to couples having either their second or third child.
For now, though, Berning noted, China’s dairy product imports are certainly not that impressive. In May, China imported 67.6 million pounds of whole milk powder (WMP), or 13% less than in May 2024. With May’s sizable drop, year-to-date WMP imports were up only 1% compared to January through May 2024, according to TDM. Skim milk powder (SMP) imports fared better, with 42.9 million pounds imported in May, up 26% from May 2024.
“Even so, skim milk powder imports still fell within the bottom half of the past decade’s values for May,” Berning noted. “And other key dairy imports also saw red. For instance, year-over-year imports of ultra-high temperature declined 8.3% and monthly volumes have been down for the past 17 months, as consumption stalls and China works to supply more of its own needs.”
The United States exports a sizable portion of its whey to China, Berning said, but under the current tariff environment, China’s imports of U.S. whey dropped 8.6%. China’s total whey imports of 112.9 million pounds, however, were down only 0.9% from May 2024, highlighting the impact of trade tensions between China and the United States, she said.
Butter imports also fell year over year but remained up year to date through May, and cheese imports posted a fourth consecutive month of gains—one of the few bright spots in the data, she added.
According to figures from the Chinese government, milk powder consumption fell precipitously at the end of 2024 and has remained well below 2024 and 2023 volumes through the first four months of 2025. Furthermore, Berning said, China’s milk production reportedly decreased 2.8% in 2024, partly due to weaker demand and marked the first decline in five years.
Source : Dairynews7x7 June 29th 2025 Dairy Herd