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China’s Weakening Economic Growth Impacts Dairy

China’s imports of dairy products, from the United States and elsewhere, remain depressed, and what happens in China has a major impact on U.S. milk and dairy product prices, especially as exports account for a growing share of overall U.S. milk production. Sarina Sharp, analyst with the Daily Dairy Report, said that China’s recent economic woes are already having an impact on the country’s milk and dairy product imports.

“Despite a modest slowdown in domestic milk production, China clearly has enough whole milk powder on hand to eschew foreign product, and that has been keeping global milk powder prices in check,” Sharp said.

While China’s economic recovery from the pandemic has not been as robust as some anticipated, the forecast going forward looks much dimmer. Estimates from the International Monetary Fund (IMF) for 2023 call for 5.4% year-over-year growth in gross domestic product (GDP), which is only moderate growth for the world’s second largest economy. Looking ahead, IMF expects economic growth in China to slow. Continued weakness in China’s housing market and tepid demand for China’s exports could pressure 2024 GDP growth to only 4.6%, and by 2028, growth in China should slow to about 3.5% as the country’s population ages, according to IMF.


December 1, 2023


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