China Dairy Sector Stable

China's dairy sector continues to adjust under ample domestic milk supply, with production expected to remain broadly stable in 2026. Processors are shifting milk toward higher-value products such as butter and cheese. Weak retail demand and reduced use of reconstituted milk weigh on whole milk powder consumption. The US Department of Agriculture forecasts imports of whole milk powder and skimmed milk powder to decline due to weaker demand, while butter imports remain stable and cheese imports increase.