Welcome to the December issue of Dairy Products China News.
At the current stage of China's dairy industry, the sector is facing the most severe challenges in recent years. In 2024, domestic demand for dairy products has remained in a weak recovery state, while intense price wars within the industry have further exacerbated market tensions.
Despite the overall poor market performance, some regional dairy companies have not halted their expansion. This year, several dairy firms have announced plans to expand production. These moves are driven by both the inertia of corporate strategic planning and the ambition to seek new opportunities amidst adjustments. Particularly in the fresh milk market, while overall retail sales of dairy products have decreased YoY, the category of fresh milk has continued to grow, becoming the core business and growth point for regional dairy companies. Data shows that from Jan. to Oct. 2024, the national dairy output was 24.5 million tonnes, a decrease of 2.3%, with the average price of raw milk falling by 16.1% compared to the previous year. These figures reflect the overall market's downturn. However, the expansion actions of dairy companies indicate an optimistic attitude towards the resource conditions in regions like Northeast China and the strategic demand for a full industrial chain layout, as well as a positive outlook on the dairy consumption market space in populous provinces like Shandong.
The actual impact of expansion still awaits further market verification, but undoubtedly, China's dairy industry is in a critical period of transformation and adjustment.
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