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China is buying milk powder again, for now

The recent Global Dairy Trade event August 20th saw the price index jump five and a half percent, with the biggest price jump in the whole milk powder market.

Katie Burgess with Ever.ag tells Brownfield there’s a reason for the price jump. “We finally saw China come back to the Global Dairy Trade and buy a little bit more, in fact, China bought the most they have so far this year.”

Burgess says earlier this year, Chinese dairy purchases were at a twelve-year low and there’s no guarantee China will continue to buy more milk powder. “Now the question is, do they just need some and show up for a couple of auctions or are they going to be a more sustained buyer? We don’t know that their domestic demand has increased at all yet. Theymight just need some product because some of their other product is getting old.”

Burgess says there have been large increases in Chinese domestic dairy production, but their milk prices have been falling this year causing their milk production levels to flatten out.  Burgess says it’s possible the Chinese government might also encourage some dairy herd reduction to boost farm gate prices, which could lead to some additional imports.