China’s milk supply will continue to be in excess in the first half of 2025, but will normalise in the second half of the year following efforts to regulate production, the agriculture ministry said in a statement on Friday.

The world’s third largest milk producer is awash with unwanted milk as falling birth rates and cost-conscious consumers have cut demand, forcing smaller farmers out of business and squeezing shipments.

Beijing in September issued guidance for farmers to control dairy output, optimise herd structures by eliminating older and less productive cows and shore up consumption.

“The number of dairy cows in stock has been gradually adjusted and optimized, and the overall dairy production has remained stable,” the ministry said.

“It is expected that the contradiction between supply and demand in the dairy industry will gradually ease in the second half of next year, but the pressure of excess milk in the first half of the year will still be relatively large,” it said.

Milk production during the first 11 months of 2024 reached 26.95 million tons, a decline of 2.4% from the previous year.

Output in 2023 had surged to nearly 42 million tons, surpassing Beijing’s 2025 target of 41 million tons amid declining consumption of higher-priced foods like cheese, cream and butter.

The agriculture ministry said there is still potential and room for consumption growth in the future.

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