The Kiwi dairy industry isn't the only major exporter unsettled by China's smaller appetite for dairy imports. Photo / Shawn McAvinue
The Kiwi dairy industry isn't the only major exporter unsettled by China's smaller appetite for dairy imports. Photo / Shawn McAvinue
China’s appetite for dairy imports continues to disappoint, says the US dairy industry, which in the new year flagged China as a “critical signpost” to export success this year.
The US Dairy Export Council in its latest update said despite improvements in Chinese demand for whey, a byproduct of cheeseand casein manufacturing, China’s overall dairy import appetite continued to disappoint, noting “all major supplying (dairy export) countries affected”.
However, the council said total US dairy shipments to China fell only 1% in June, the smallest year-on-year decline of the year. And “the rest of the world” had that month helped make up for China’s lagging import appetite, it reported.
China is New Zealand’s biggest dairy market. Despite its economic contraction, it remains the world’s biggest importer of dairy product. New Zealand exports 95% of all milk it produces. The US exports around 18% of its production.
US dairy exports posted essentially a flat June, the council said, as gains in cheese, whey, butterfat and whole milk powder nearly offset declines in nonfat dry milk/skim milk powder, lactose and milk protein concentrates. In milk solids equivalent terms, year-over-year volume slipped 0.3% for the month. Year-to-date US dairy export value was off 5% to $4.09 billion, the council said.
However, cheese and whey exports remained on a roll in June, it said.
US cheese sales grew for the sixth straight month, rising 9% (3203 metric tonnes MT). The increase to 38,876 MT was the second-biggest June for cheese since 2022.
“But the impact of the spring run-up in US prices may be starting to show: June marked the first time monthly US shipments fell below 40,000 MT since January 2024,” the council said.
Total US whey exports posted their third straight month of double-digit gains in June, rising 12% (5446 MT), with encouraging buying signs from the top two customers, China and Southeast Asia, the council said.
Stronger demand from China had boosted both dry and modified whey exports, as combined volume rose 22% (2268 MT) in June.
There are signs of new life in China's pig breeding industry, which will boost demand for dairy whey imports to feed piglets. Photo / Supplied
The council said beginning 2023 and into this year, low prices and Chinese government mandates had led to a thinning of the Chinese hog herd. But now hog prices were on the rise, with some analysts estimating live pig prices have improved by as much as 30% since the beginning of the year. Higher prices and improved producer margins due to lower feed costs were again encouraging pig breeding, increasing the demand for whey products for feeding piglets.
China wasn’t the only destination delivering growth for dry and modified whey exports, as bright spots had also emerged in Southeast Asia, the council said.
Early this year the council said China remained the first major variable likely to influence the direction of US dairy exports and global markets in 2024. It cited China as an important signpost to dairy trade in the year ahead for the US dairy industry.
The council said despite contraction in 2022 and stagnation in 2023, China remained the largest dairy importer in the world, a position it was likely to retain for the foreseeable future.
Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the $26 billion dairy industry, agribusiness, exporting and the logistics sector and supply chains.
