China's 2024 whole milk powder production to increase

 In 2024, China's production of whole milk powder (WMP) is expected to increase due to higher raw milk production, according to a recent USDA Dairy World Markets and Trade report. Larger supplies of raw milk that the fluid milk market cannot absorb is being diverted to WMP production, which has a longer shelf life and can be stored for later use. Despite the growth in production, WMP production remains less profitable for dairy processors, leading them to limit raw milk purchases for drying. This limitation has created difficulties for farms without purchasing contracts to sell their excess raw milk, often forcing them to sell at prices below cost of production. Subsidies from some provincial governments are helping dairy processors offset the losses from WMP production, further supporting the increase in production.

WMP usage is expected to see modest growth in 2024, driven by its application in many processed food and drink products. However, the overall growth will be limited compared to previous years as the market adjusts from higher consumption levels during the pandemic.

China imports of WMP are projected to decline in 2024, influenced by the substantial domestic production and large inventories from previous years. Historically, dairy processors preferred imported WMP for its consistent quality and nutritional standards compared to local product. However, improvements in domestic production quality are gradually shifting this preference. Higher levels of domestic production, combined with large carryover stocks, are expected to reduce the need for imports.