A report released this week by the USDA shows the 2016 Chinese forecast for milk production, domestic demand and imports of whole milk powder and UHT up slightly.
The report released by the USDA Foreign Agriculture Service Bureau in Beijing projects milk production in China to be 38 million tons in 2016, a slight increase from USDA’s 2015 estimate. The increase reflects both the rising number of dairy cows in the country and the number of live cows that have been imported by the Chinese to improve their individual cow production according to the report. Australia leads the way on this front with more than 6,000 live cows sent to China this year.
Projections for whole milk powder imports to the country also rose slightly. The report forecasts 2016 imports to be around 400,000 tons which is an increase from 2015 but not anywhere near the 671,000 tons sent to the country in 2014. New Zealand provides roughly 90% of China’s imported whole milk powder, but U.S. companies continue to increase their capacity to produce the commodity. Think DFA.
Domestic demand for fluid milk in China increased slightly to 40 million tons according to the report. The majority of the fluid milk sold in the country is reconstituted whole milk powder. However, with the increase of milk production in China more Chinese milk is being consumed by its people. The report explains that many farms are packaging their milk to be sold under their own brand name as way to increase margins and offset the tremendous cost associated with producing milk in China.
In addition, USDA says UHT milk imports will grow by 8.5%. That is great news for European farmers swimming in quota free milk. Europe leads the way in UHT imports to China with 65% of the market share.
You can read the full report from the USDA Foreign Agriculture Service here.