Core Viewpoint - The 16th China Dairy Industry Conference focused on how the dairy industry can break through in transformation and seek high-quality development paths amidst challenges [1] Group 1: Industry Challenges and Changes - The Chinese dairy industry is undergoing profound changes, with increasing demand for diversified, personalized, and functional products due to consumption upgrades [1] - High breeding costs, structural contradictions in milk supply, and the need for improved integration of the industry chain are significant challenges facing the industry [1] - The average price of fresh milk in major producing provinces was 3.04 yuan/kg in the first week of July, a year-on-year decrease of 6.5% [9] Group 2: Economic Impact and Financial Data - From 2023 to 2025, the cumulative income loss in China's dairy farming industry is projected to reach 70 billion yuan, with losses from fresh milk powder production amounting to 20 billion yuan [3] - In 2024, the total raw milk production in China is expected to be 40.79 million tons, a year-on-year decrease of 2.8%, marking the first decline since 2018 [3] - Over 60% of the 28 listed dairy companies in A and H shares experienced a decline in revenue in 2024, with 15 companies seeing both revenue and net profit decrease year-on-year [6] Group 3: Strategic Recommendations and Industry Support - Experts suggest that the dairy industry needs to continue reducing production capacity to stabilize prices and achieve a balance between supply and demand [3][4] - The industry is advised to adopt strategic planning and top-level design to avoid drastic fluctuations in the number of dairy cattle [4] - The Ministry of Agriculture and Rural Affairs emphasized the need for effective implementation of industry support measures to enhance competitiveness and extend the industry chain [4] Group 4: Innovation and Market Opportunities - Companies are focusing on optimizing industry structure, enhancing the entire industry chain, and exploring new product categories and consumption scenarios [8] - The dairy industry is characterized by a dominance of liquid milk, which accounted for 92.7% of total dairy product output in 2024, while deep-processed products remain underrepresented [7] - There is a growing demand for B-end dairy products, and companies are exploring opportunities in tea drinks, coffee, and baking ingredients to expand the domestic dairy market [8] Group 5: Future Outlook - Industry insiders believe that with accelerated capacity reduction, structural optimization, and the release of consumer potential, signs of a market reversal are emerging [9] - Historical experience suggests that the dairy industry operates on a cycle of approximately 7 to 8 years, with a potential turning point expected in the second half of this year to the first half of next year [9] - Companies are encouraged to innovate and embrace technology to drive the transformation of the dairy industry and meet consumer demands for high-quality, personalized products [10]

Advanced Manufacturing Group - In June 2024, China's power battery sales reached 94.1 GWh, with a month-on-month increase of 7.6% and a year-on-year increase of 34.9% [3] - The export volume of power batteries was 15.8 GWh, showing a month-on-month growth of 17.1% and a year-on-year growth of 16.6% [3] - The installed capacity of power batteries in June was 58.2 GWh, with a month-on-month increase of 1.9% and a year-on-year increase of 35.9% [3] - Lithium iron phosphate (LFP) batteries accounted for 81.5% of the total installed capacity, with a year-on-year growth of 49.7%, indicating a strong market position [3] - The significant growth rate of LFP batteries is attributed to their cost advantages and improved performance, making them the preferred choice for most mid-to-low range electric vehicles [3] Consumer Group - The National Health Commission approved D-Allulose and other new food ingredients, which could drive the development of low-sugar and low-calorie products in the sugar substitute market [7] - The Ministry of Agriculture emphasized the need to support the dairy industry, which is showing signs of stabilization and recovery due to various supportive measures [7] - Factors such as potential production decreases due to heat stress on dairy cows and increased consumption of cold drinks are expected to positively impact the dairy market in the upcoming months [7]

Industry Overview - The demand for dairy products continues to decline, with liquid milk sales in China dropping by 7.5% year-on-year from January to May 2025, and offline sales decreasing by 9.7%, while online sales grew by 4.8% [1] - In April 2025, the overall sales of dairy products across all channels fell by 9.5% year-on-year [1] Government Response - The Ministry of Agriculture and Rural Affairs held a meeting on June 25, 2025, to discuss measures to support the dairy industry, emphasizing the need for continued implementation of relief policies and enhancing the industry's competitiveness [2] - The Minister highlighted the importance of extending the industrial chain, increasing added value, and stabilizing the confidence of production entities in the dairy sector [2][3] Policy Measures - The government plans to boost dairy consumption through public awareness campaigns about the health benefits of milk and to encourage compliance with new sterilized milk standards [2] - There is a focus on strengthening dairy processing capabilities and developing diversified deep-processing products to transition from simple processing to advanced processing [2][3] Market Sentiment - Various policies are aimed at restoring confidence in the dairy industry, indicating a collective effort to address the challenges faced by the sector [4]