Growth of China’s Raw Milk Price Accelerated in August

According the monitoring by the Ministry of Agriculture and Rural Affairs, in August 2020,  growth of China’s raw milk price accelerated. The increase has expanded both MoM and YoY. Raw milk price was 3.7 yuan/kg early August and rose to around 3.8 yuan/kg in late August. The monthly average price in August was 3.73 yuan/kg, a month-by-month increase of 0.11 yuan/kg, up by 3%, which was a year-on-year increase of 0.08 yuan/kg, up by 2%.
In terms of regions, except for Hubei, Guangdong and Yunnan, milk prices in other regions all rose MoM.
In the main producing areas, the milk prices in Hebei and Shandong continued to grow strongly, rising by 0.18 yuan and 0.15 yuan per kilogram, while those in Inner Mongolia, Henan and Heilongjiang increased by 0.08 yuan, 0.05 yuan and 0.04 yuan respectively.
The main reasons for the acceleration of milk price rise in August include:
(1) The cost of cow feed is rising.
(2) Residents' life has gradually returned to normal, and the demand for dairy products has recovered. At the same time, milk drinks and yogurt entered the seasonal consumption peak season, and the demand for raw milk increased.
(3) Heat stress and flood affected the supply of fresh milk.