China Dairy Sector "April 2026: sow herd contraction moderates; demand r..."

Research evidence excerpt

China Dairy Sector "April 2026: sow herd contraction moderates; demand r..."

Global Research

12 May 2026ab

China Dairy Sector Equities

ChinaApril 2026: sow herd contraction moderates;

demand recovery continues Consumer, Non-Cyclical

Nina Jiang

Analyst

nina.jiang@ubs.com

Supply: herd contraction eased; production growth supported by yield gains +852-2971 5681

According to the Ministry of Agriculture, the milkable sow herd showed initial signs of Christine Peng, CFA

stabilization: the number of milkable cows increased slightly by 0.3% MoM (+18k Analyst

heads), although it remained down 3.6% YoY at 5.8mn heads. Despite the YoY decline christine-y.peng@ubs.com

in herd size, raw milk production rose 4.2% YoY, primarily driven by continued +852-2971 7571

improvements in per-cow yields (+4.2%). Industry profitability remained under pressure, Steven Dang

with average farming losses of approximately Rmb 0.1/kg; c.69% of farming entities Associate Analyst

were estimated to be operating at a loss during the month. steven.dang@ubs.com

+852-3-712 2195

Demand: liquid milk consumption continued to recover, led by volume growth

Channel checks indicate that liquid milk consumption maintained its recovery

momentum in April, delivering low- to mid-single-digit sales growth following Q126

trends. Growth was primarily volume-driven, with average selling prices remaining

broadly stable. Distributors highlighted improving self-consumption demand on a YoY

basis. By category, fresh milk continued to outperform, with growth exceeding 10%. At

the company level, Mengniu’s liquid milk segment is expected to deliver mid-single-digit

growth, while Yili posted low-single-digit growth based on channel checks. Inventory

levels at both companies remained healthy, suggesting balanced supply-demand