Recently there has been widespread talk of China’s dairy imports declining in 2014, however the U.S. Department of Agriculture (USDA) states that evidence indicates that Chinese import demand for a wide span of dairy products will continue to be strong. Dairy values at GlobalDairyTrade auction this week hit a 21-month low which many have attributed to weaker demand from China, but the USDA accounts the performance to an increase in production. The department increased its forecast for global milk production for 2014 by 3.2 million tons to 482.1 million tons as a result of higher output from the EU and New Zealand. At the same time the department has lowered its forecast for domestic milk production in China by 1 million tons to 36 million tons as stricter quality and health regulations bring down supplies. Citing that Chinese consumers are still willing to pay higher prices for imported dairy products, combined with growing demand and tighter supplies, the USDA has raised its estimate for Chinese whole milk powder imports by 350,000 tons to 1 million tons which is more than three times the import rate of three years ago.
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