Milk Predict

Milk Predict AI

Rabobank report: the Chinese market and global dairy trade

As the third largest producer of milk globally and the largest importer, China is a very important part of the global dairy market. A recent Rabobank report examined how developments in the Chinese dairy sector could affect the global dairy trade.

Key Points

  • Chinese domestic milk production has tripled since 2002
  • An increasing proportion of the herd is housed on large scale (over 1000 cows) farms
  • Rabobank estimates an import deficit of 11.9m metric tons liquid milk equivalent (LME) in 2023
  • The import deficit is expected to increase over the next ten years as demand in China increases at a greater rate than domestic supply


Rabobank report that China’s domestic production of milk has tripled over the last 20 years from 13m metric tons in 2002 to almost 39.2m metric tons in 2022. This increase was driven by significant investment in the sector to boost national food security and safety.

Since 2019, growth has increased at an even faster rate as the Chinese government have placed emphasis on self-sufficiency over financial returns using policies that encourage development of large-scale dairy farms and prioritise production of high quality forage grass.

It is highlighted that the increase in the Chinese dairy herd has been significantly aided by live cattle imports, with a record 232,00 head imported from Australia and New Zealand combined in 2022. 

The report also comments on the changing profile of the Chinese dairy herd. Rabobank states that the percentage of the Chinese dairy herds on farms with over 1,000 head increased from 24% in 2015 to 44% in 2020, as the sector moved towards larger scale production, driven by government policy. They estimate that this trend will continue, with the percentage of the national herd on farms with over 1,000 head to increase again to 56% by 2025.


Rabobank identified several drivers of increased dairy consumption in China over recent years. These include:

  • Increased disposable income that has enhanced demand for high-quality food products
  • Increasing the national guideline dairy intake
  • Government funding of a national programme to provide milk in schools
  • Work in the retail space to increase innovation and product ranges which improve the range and quality of dairy products

Import demand

The report estimates China to have an import deficit of 11.9m metric tons LME in 2023, likely caused by a lag in supply growth as a response to weakening milk prices and higher feed costs. Looking forward to 2032, Rabobank modelled a baseline scenario, using this reduced supply growth of 1.5% and a moderate increase in consumer demand growth of 2.4% annually.

Using this baseline scenario, it is estimated that the import deficit will increase to 15m metric tons LME by 2032. However, the report also identified some swing factors that could alter this. These factors include changes in demand growth caused by changing spending patterns (reduced or increased spending depending on the economy). Additionally, it was acknowledged that significant investments in the Chinese dairy industry could increase domestic production growth beyond the projected baseline figure. Considering these swing factors, Rabobank suggest that the import deficit is likely to sit between 8m and 19.2m metric tons in 2032. This modelling demonstrates that imports of dairy products to China will still remain an important part of the industry, even if longer term volumes are lower than at current.

Source:- Rabobank


Subscribe To Our Newsletter

Get updates and learn from the best

More To Explore

Scroll to Top

Please fill out the below and we will get back to you as soon as possible.

× How can I help you?