The national milk production was 18.56 million tons, up 3.4% year-on-year, and the growth rate was 50% last year.

The growth rate of milk production in the main production areas of Inner Mongolia and Hebei has slowed down, while Gansu and Ningxia still maintain a high growth rate.

In 2024, the growth rate of listed animal husbandry groups will slow down, the yield will continue to increase, and the output will continue to increase.

The stock of dairy companies' own pastures will increase slightly, and the stock of social pastures may decrease by more than 200,000 heads.

The domestic dairy market has recovered slowly, the price of raw milk will continue to run at a low level in the second half of the year, and the number of dairy cows will continue to decrease.

The dairy industry continued to be sluggish in the first half of 2024, and the mismatch between supply and demand is still the main problem of the industry. Although dairy companies have promoted and reduced prices on a large scale under the state of oversupply, the price of dairy products is still at a relatively high level, which is difficult to significantly stimulate consumption.

According to the data of the Ministry of Commerce, the average retail price of milk (UHT milk) in my country in the first half of 2024 was 12.3 yuan/liter, with a price ratio of 3.5 to raw milk, which is higher than the international average of about 2.0. Under this price, according to the dietary guidelines, the average daily milk consumption of 300g, milk expenditure accounts for 22.2% and 13.8% of the food expenditure of rural and urban residents respectively, which is a heavy burden for consumers, especially low-income people.

Considering the combined factors of the single domestic dairy product structure, the decline in the demographic dividend, and the slowdown in the growth of residents' income, it is difficult for the consumption side to recover in the short term. So what is the situation on the supply side in the first half of the year?

Part.01

In the first half of 2024, my country's milk production was 18.56 million tons, up 3.4% year-on-year, and the growth rate was 50% last year

In the first half of 2024, the national raw milk production was 18.56 million tons, up 3.4% year-on-year. The raw milk production in the first quarter increased by 5.5%. From 2020 to 2023, China's raw milk production growth rate remained at around 7%. At present, the growth rate of raw milk production has slowed down.

According to the monitoring data of the fresh milk purchasing station of the Ministry of Agriculture and Rural Affairs, from January to June, the fresh milk production of the milk station increased by 7.8% year-on-year, and the growth rate of fresh milk production continued to slow down.

Part.02

The growth rate of milk production in the main production areas of Inner Mongolia and Hebei has decreased, while Gansu and Ningxia still maintain a high growth rate

The milk price is low, the ranch is losing money, and the elimination or exit from the industry has increased. The number of dairy cows in some areas has been reduced in detail. The milk production in the two main production areas of Xinjiang and Henan has decreased year-on-year in the first half of the year. They are the leading areas in reducing production capacity and reducing production in the main production areas.

The production growth rate in Inner Mongolia and Hebei, the two largest raw milk producing areas in China, is lower than the national average. The two major producing areas have a surplus of milk, and milk prices continue to be sluggish. Dairy companies force ranches to increase the number of dairy cows to be eliminated. According to Holstein's estimates, the number of dairy cows in Hebei and Inner Mongolia has turned downward in the first half of 2024, decreasing month-on-month.

Gansu had the largest increase in milk production in the first half of the year, and it was the only major producing province with an increase of more than 30%, which is much higher than the national average. Although the growth momentum is strong, the ranches are already overwhelmed. A large amount of raw milk in Gansu is shipped to the south, and milk prices remain at a low level. Gansu is one of the provinces with the fastest growth in milk production in the past two years. In 2020, milk production was less than 600,000 tons, and in 2023 it exceeded 1 million tons, an increase of more than 60%. It will continue to grow in 2024, but the growth rate will slow down. At present, the new ranch projects in Gansu are progressing slowly or stagnant, and some ranches have begun to reduce the number of dairy cows.

Although Ningxia's milk production maintained a high growth rate in the first half of the year, the number of dairy cows on hand has decreased significantly. The industry estimates that Ningxia's dairy cow inventory will decrease by 100,000 to 150,000 heads in the first half of 2024, a decrease of about 10% to 15%.

Part.03  Milk production growth in some provinces and regions in the first half of 2024

In 2024, the growth rate of the listed animal husbandry group's stock slowed down, the yield continued to increase, and the output continued to increase

In the first half of 2024, the overall growth rate of the listed animal husbandry group slowed down, the milk production continued to grow, and the yield increased significantly.

The inventory of adult cows of Youran Animal Husbandry continued to grow, and the growth rate declined. The inventory in the first half of 2024 increased by 5% compared with the end of 2023, while the inventory of adult cows at the end of 2023 increased by 22.7% compared with 2022, and the growth rate in the first half of 2024 decreased significantly.

Modern Animal Husbandry also maintained growth, with an increase of 3% in the first half of 2024 compared with the end of 2023, and an increase of 9.5% in the inventory of adult cows in 2023 compared with the end of 2022.

The inventory of adult cows of Australia Asia Group turned from increasing to decreasing, with a decrease of 2.5% in the first half of 2024 compared with the end of 2023, and an increase of 9.1% in the inventory of adult cows in 2023 compared with the end of 2022.

China Shengmu has the largest decline in the number of adult cows, with a year-on-year decline of 10.2% in the first half of 2024 and a 3.2% increase in the number of adult cows in 2023 compared to the end of 2022.

Listed animal husbandry groups' adult cow inventory and milk production in 2024H1

The improvement is obvious. Australia Asia Group is still the listed animal husbandry group and the animal husbandry group with the highest average yield in the country. The yield per unit area reached 13.7 tons in the first half of 2024, an increase of 2.2% year-on-year; Modern Animal Husbandry's average yield per unit area also reached 13 tons, an increase of 3.2% year-on-year; Youran Animal Husbandry's average yield per unit area was 12.6 tons, which was also at a relatively high level, an increase of 3.3% year-on-year; China Shengmu's yield per unit area increased the most; Yuanshengtai followed closely, increasing by 10.3% and 9.3% respectively, reaching 12.1 tons and 12.4 tons per unit area.

Listed animal husbandry group yield per unit area 2024H1

The number of dairy cows in dairy companies' own pastures has increased slightly, and the number of dairy cows in social pastures may decrease by more than 200,000

According to the monitoring data of the fresh milk purchasing station of the Ministry of Agriculture and Rural Affairs, the number of dairy cows in my country has decreased month-on-month for four consecutive months in the first half of the year. According to the public reports of listed companies and Holstein's visit, the number of dairy cows in dairy companies' own pastures in the first half of the year continued to grow slowly, and the source of cattle that decreased was mainly social pastures and small and medium-sized pastures.

Holstein surveyed 23 large social pastures (animal husbandry groups) across the country. At the end of June 2024, the total number of dairy cows was more than 700,000, which was nearly 50,000 less than at the end of 2023, a decrease of 6%. It is estimated that about 200,000 dairy cows will be eliminated in social pastures across the country in the first half of the year, or even more than 200,000.

Part.05

The domestic dairy market has recovered slowly, the price of raw milk has continued to run at a low level in the second half of the year, and the number of dairy cows has continued to decrease

According to the data of the National Bureau of Statistics, the output of raw milk in my country in 2023 will increase by 2.65 million tons year-on-year, an increase of 6.7%, a record high, but affected by the consumption environment, the annual milk consumption will decrease by about 1.6%.

Consumption continued to slow down in 2024, and the dairy industry market recovered slowly. The performance of listed dairy companies showed that 26 dairy companies achieved a total revenue of 177.498 billion yuan in the first half of the year, a year-on-year decrease of 7.83%. Among the 26 companies, only 6 companies achieved double growth in revenue and net profit in the first half of the year, and the net profit of 16 dairy companies declined year-on-year. The consumption environment has a great impact on the dairy industry.

In the second half of 2024, the domestic market demand for dairy products is unlikely to grow significantly. It is expected that the domestic raw milk purchase price will remain low in the later period. In order to achieve a balance between supply and demand, the number of dairy cows will be further reduced.