奶不如水贵？现代牧业“过冬”：两年累亏25亿 3年换2任董事长

This article sheds light on the operating predicament and self-rescue efforts of Modern Dairy, China’s leading raw milk producer, after the domestic raw milk industry entered a downward cycle. Key takeaways are as follows:

1. Current industry status: Since 2021, raw milk has been in oversupply, and prices have continued to decline. The average price of raw milk dropped to 3.06 yuan per kilogram in 2025, even lower than the price of bottled mineral water. At its peak, over 90% of the whole industry was operating at a loss, and the excess capacity has not been fully eliminated.

2. Modern Dairy’s operating performance: As the industry leader, Modern Dairy accumulated a total loss of 2.546 billion yuan over 2024 and 2025, wiping out all 2.526 billion yuan in profits it earned between 2020 and 2023. As of the end of 2025, the company’s interest-bearing debt reached as high as 19.26 billion yuan, with 7.14 billion yuan in short-term debt due within one year. Its total working capital is less than 7 billion yuan, which cannot cover its short-term liabilities, putting enormous pressure on its capital chain.

3. Self-rescue measures: The company has replaced its board chairman twice in just three years. Current chairman Chen Yiyi is a core figure from the Mengniu ecosystem. Modern Dairy is currently acquiring and integrating China Shengmu to expand scale and access high-end milk sources. However, China Shengmu itself has been loss-making for consecutive years, so the outcome of the integration remains unclear.

This article outlines the current development status and consumer trends of China’s raw milk industry, offering reference for business decision-making for dairy brands. Key insights are as follows:

1. Consumer trends and industry environment: Overall consumer demand for dairy in China is declining, with high-end milk consumption losing steam and consumer willingness to pay for "premium milk source" concepts falling. The entire industry has shifted from an expansion phase to a mature downward cycle, with raw milk in oversupply, excess capacity yet to be fully cleared, and a still high industry-wide loss ratio.

2. Reference for product portfolio planning: Even high-end positioned milk sources marketed as "desert organic" have fallen into sustained and widening losses, indicating that high-end product positioning cannot rely on concepts alone. It must align with current mass consumers’ purchasing power and actual demand. Brands need to adjust the pricing and marketing strategies of their high-end product lines to avoid pitfalls.

3. Reference for navigating industry cycles: During the downturn, leading dairy players are integrating internal pasture resources, cutting costs by eliminating low-yield, inefficient capacity, and acquiring high-quality assets at the bottom of the cycle to expand scale and optimize tiered milk source and product structures. This integration approach can serve as a reference for brands to adjust their own milk source layout and product structure to weather cyclical volatility.

This article sorts out the current status, risks and opportunities of the raw milk industry during its downward cycle, offering reference for dairy-related sellers. Key insights are as follows:

1. Risk warning: The current raw milk market is oversupplied, with prices continuing to fall. At its peak, over 90% of the industry was loss-making. While conditions have eased, the loss ratio remains high, excess capacity has not been fully eliminated, and weak demand has intensified price competition risks. Sellers need to prepare in advance and manage operational risks proactively.

2. Opportunity outlook: Leading dairy companies are accelerating the integration of their pasture resources, which will continuously raise industry concentration. Small and medium-sized dairy sellers can pursue cooperation opportunities with leading players to access their supply chain and channel resources and secure room for survival. The industry integration phase also brings opportunities to acquire high-quality assets at depressed valuations for sellers with sufficient capital.

3. Reference for coping strategies: Leading players cut costs by eliminating low-yield, inefficient capacity and cutting capital expenditure, while optimizing cash flow management during the downturn. These practices can be adopted by sellers of all sizes. The core priority is to control debt scale and avoid capital chain rupture caused by excessive short-term debt.

This article sorts out the latest development of China’s raw milk production industry, offering operational reference for raw milk production facilities. Key insights are as follows:

1. Product production and design requirements: Amid current weak market demand and overall raw milk oversupply, cost control is the core competitiveness. Low-yield dairy cows raise production costs and can no longer adapt to market demand, so pastures need to proactively optimize herd structure by culling low-yield cattle. While high-end organic is a viable product differentiation direction, producers must control production costs to match current consumers’ price acceptance, and avoid blind expansion into the high-end segment.

2. Business opportunities: The industry is currently in a phase of capacity clearance and accelerated integration, with leading players continuously acquiring and integrating pasture resources to expand scale. Small and medium-sized pastures holding high-quality milk source assets have opportunities to be acquired by leading enterprises, enabling an exit path or cooperative development.

3. Industry takeaways: Scale and intensification are the overriding trend during the industry downturn. Small and medium-sized producers need to optimize their asset structure, control debt levels, and improve asset quality in advance to better navigate cyclical volatility and seize cooperation opportunities during the integration phase.

This article sorts out the development trends and core pain points of China’s raw milk pasture industry, offering reference for business layout for dairy-related service providers. Key insights are as follows:

1. Industry development trends: The raw milk industry has entered a downward integration cycle, with capacity clearance still ongoing. Leading pastures are expanding scale through mergers and acquisitions, which will continuously increase industry concentration, leading to a future market structure dominated by a smaller number of leading players.

2. Core customer pain points: The vast majority of pastures currently face loss pressure, with four core pain points: first, difficulty controlling production costs amid continuously shrinking profit margins; second, tight cash flow and heavy debt pressure, with many enterprises unable to cover maturing short-term debt; third, difficulty achieving management integration after mergers and acquisitions; fourth, difficulty monetizing high-end milk source brands, as consumers are unwilling to pay premium for concepts.

3. Business opportunities: Service providers can develop targeted solutions addressing the above pain points, such as herd optimization management services, cash flow and debt management consulting, M&A integration consulting, and high-end milk source brand marketing services, to help pastures weather cyclical pressure and unlock new growth space.

This article outlines the integration trends and operational pain points of the current raw milk industry, offering reference for operational adjustments for dairy-related platform operators. Key insights are as follows:

1. Core industry demands for platforms: A large number of small and medium-sized pastures are currently loss-making, with widespread demand for lower procurement costs for feed and other inputs, expanded raw milk sales channels, and access to industrial capital. Leading pastures need M&A consulting, brand promotion, and resource matching services. Platforms can develop targeted offerings around these demands.

2. Risk mitigation tips: Amid overall industry overcapacity, weak consumer demand, and widespread unprofitability, platforms need to prioritize examining the cash flow health and debt levels of prospective onboarding enterprises during business expansion and recruitment, to avoid spillover of enterprise operating risk to the platform.

3. Platform development opportunities: With accelerated industry integration, a large number of high-quality pasture assets are currently undervalued. Platforms can build relevant service segments around industry integration, such as capital matching, pasture property rights trading, and shared supply chain services. This will attract both leading enterprise clients and meet the cooperation needs of small and medium-sized pastures, expanding the platform’s business scope.

This article documents the latest industry developments and emerging issues in China’s raw milk industry during the downward cycle, offering high reference value for industrial research. Key insights are as follows:

1. New industry developments: China’s raw milk industry has entered a deep adjustment cycle, and the oversupply pattern has persisted for five years. The industry-wide loss ratio peaked at over 90%, and even leading pastures have posted consecutive large losses. On one hand, the industry is clearing capacity by culling low-yield cows; on the other hand, leading dairy enterprises are leading the integration of pasture resources, driving a rapid increase in industry concentration.

2. New emerging industry issues: The pace of excess capacity clearance has been far slower than expected. Although the total national herd size has declined, higher milk yield per cow has kept total output growing slightly, leaving the oversupply pattern unchanged. Leading enterprises are pursuing M&A integration while facing their own losses and tight capital chains, which further amplifies operational risk. Meanwhile, frequent management changes undermine the stability of long-term strategy. All these are new issues emerging during the industry downturn.

3. Reference for business model research: The "whole industry chain + high-end milk source" asset-heavy model adopted by leading pastures still cannot avoid large losses during the downturn, indicating that asset-heavy breeding models have shortcomings in anti-cyclical risk resistance that require further optimization. This provides a typical case for research on asset-heavy agricultural business models.