Demand for imported dairy is expected to increase in 2015, with Chinese farmers struggling to compete with foreign prices.
China’s dairy demand is growing in line with urbanization trends. By 2050 China’s cities will represent 77% of the population, compared to 54% today. Over 90% of dairy consumption is attributed to urban dwellers.
A scandal over tainted milk in 2008 drove foreign imports. According to the Chinese Ministry of Agriculture, prices have dropped by over 10% last year from RMB 4.19/kg (€0.57/kg) in January 2014 to RMB 3.75kg (€0.51/kg) in December.
Approximately 100,000 farmers have exited the business annually since 2009, with the national herd falling below 14 million head in 2014.
Recent figures released by Bord Bia show that in 2014, Asia accounted for 20% of Irish dairy exports. China is now Ireland's second most important market for dairy, compared to 13th in 2008.
Last year Kerry Group launched an Irish infant formula brand called “Green LOVE+” for the Chinese market.
Read more analysis on the Chinese dairy market
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