The U.S. Department of Agriculture forecasts a modest decline in New Zealand’s whole milk powder (WMP) production for 2024, with output expected to reach 1.375 million tons.

This reduction is largely due to a strategic pivot by dairy processors towards fresher, higher-margin products like butter, cheese, and cream. Despite the decrease, New Zealand’s WMP exports are set to rise to 1.45 million tons, buoyed by robust demand from Southeast Asia and the UAE. The first quarter alone witnessed a 32% surge in WMP exports year-over-year, supported by a recovery in global dairy prices since mid-2023. While export volumes are on an upward trajectory, the industry’s focus on diversified, high-value dairy products may temper future WMP production increases. This strategy aims to secure sustainable growth and profitability in the competitive global market.

Conversely, China’s WMP production is poised to increase in 2024 due to a surplus in raw milk supply, which is being redirected to WMP manufacturing because of its longer shelf life. Despite this increase, profitability challenges have led processors to curtail raw milk purchases for WMP production, impacting farms without fixed purchasing contracts and often forcing them to sell below production costs. Provincial government subsidies are helping to mitigate these challenges, supporting a growth in production. While WMP usage is expected to grow modestly in 2024, the market dynamics are shifting away from the heightened consumption levels seen during the pandemic.

With improvements in the quality of domestic production, China’s reliance on imported WMP is anticipated to decline as processors favor locally produced powder, further influenced by substantial stockpiles carried over from previous years.

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