Bakers prefer butter, helping prices soar
Consumers around the world are willing to pay more for products containing dairy and this is driving demand for butter and cream, says Fonterra.
It paid off. Chinese net total dairy product import volumes fell 15.7% year on year in 2023, with imports of whole milk powder - a major New Zealand export product - down 395.
However, six years later over-leveraged Chinese farmers are dumping milk and culling cows because it’s no longer financially viable to be a dairy farmer.
Demand for milk has fallen in China because of a slowing birth rate and a broader pullback in consumer spending, a hallmark of China’s struggle to recover its economy.
Now, the Government is rolling out stimulus packages to help dairy farmers.
A drop in China’s milk production may be good news for NZ exporters. China’s pain could be NZ’s gain.
