CITIC Securities: Improvement in downstream demand, bullish on the cycle of beef cattle and raw milk resonating.

The research report of CITIC Securities pointed out that in 2026, the supply of raw milk will increase slightly, the demand for liquid milk will improve, and the demand for solid milk will remain high. Since April, the price of fresh milk has remained high, the supply-demand contradiction of raw milk has continued to ease, and leading dairy companies have been advancing their deep processing layout. Since May, the price of culling cows has risen to over 22 yuan/kg, leading livestock companies have increased their layout in the beef cattle business, with a significant reduction in beef cattle inventory since 2024. Against the background of domestic clearance and import quotas, there is downward pressure on beef cattle supply in 2026. Referring to the previous beef cattle cycle clearance and price recovery pace, the research report predicts that there is still upward potential in the price of live cattle in this cycle. It continues to be optimistic about the resonance of the beef cattle and raw milk cycles, and recommends leading livestock companies with full industry chain layout, enterprises with high self-sufficiency rates in raw milk, and dairy companies benefiting from deep processing of dairy products.