China cannot cope with domestic demand for dairy

The Chinese government considers dairy products to be an essential part of the population's diet. The corona crisis has only strengthened that position. This has further boosted demand for dairy products in China, but domestic milk production continues to lag far behind growing demand.

Milk production
Over the years, milk production has generally decreased. In 2015, approximately 37,5 billion kilos of milk were produced. This fell to 2017 billion kilos in 30,4, but in 2020 milk production increased again to 33 billion kilos. Growing milk supplies remains a major priority for China in the coming years. The United States Department of Agriculture (USDA) estimates that milk production will increase 4,5% this year to 34,5 billion kilos.

At the same time, China is increasing imports of live cattle. A total of 2 units were imported in the first two months of the year, of which 78.000 were imported in January, according to Beef To China. Compared to the first 49.565 months of last year, the import volume has doubled. Australia and Uruguay remain the top suppliers of live cattle to China, followed by New Zealand and Chile.

Growing dairy imports
In order to meet domestic demand, a lot of dairy is usually imported. In the first 2 months of 2021, dairy imports took another step up. Whole milk powder is by far the most popular and imports achieved a growth of 9% compared to the same period last year. It is striking that imports increased by 40% in January and fell by 40% in February.

Liquid milk is the second most sought after product. Of this, a total of approximately 156.000 tons were imported, which is an increase of 62% compared to the same period last year. Chinese fluid milk imports for 2021 are estimated at 980.000, an increase of 5% compared to 2020.

According to the USDA, the European Union remains the largest supplier of fluid milk to China, followed by New Zealand. Cheese imports to China are expected to grow by 17% to 155.000 tonnes in 2021, thanks to strong demand. The best cheese suppliers are New Zealand and Australia.

Less popular products
Imports of not all products were higher than last year. For example, less butter, butter oil and baby food were imported. With a decrease of 19%, the largest decrease was in the import of butter.