Brazil Milk Prices Continue Upward Trend Amidst Lower-than-Expected Production
Source: DairyNews.today
Milk prices in Brazil continue their upward trajectory as supply fails to meet expectations, according to the latest report from the Center for Advanced Studies in Applied Economics (Cepea).
In August, the average price across the country reached BRL 2.7607 per liter, reflecting a 1.4% increase compared to July and a significant 17.7% rise from August 2023, adjusted for inflation (IPCA August).
Despite the 32% real increase in producer prices since the beginning of 2024, the average price for the January-August period stands at BRL 2.53 per liter, 8.4% lower than during the same period last year. Earlier projections had suggested a decline in milk prices for the third quarter of 2024, driven by increased production margins and stable demand due to lower retail prices. Additionally, the influx of high-volume imports had been exerting downward pressure on prices throughout the supply chain. However, milk production has not risen as anticipated.
The Brazilian Institute of Geography and Statistics (IBGE) released its Quarterly Milk Survey in mid-August, showing that raw milk production decreased by 6.2% in the second quarter compared to the first quarter of this year. Nonetheless, production did edge up 0.8% when compared to the same quarter in 2023.
The Cepea Milk Production Index (ICAP-L) recorded a 5% increase in production between July and August. However, key dairy-producing regions such as Minas Gerais and Goiás saw more modest gains, with increases of 2.8% and 1.5%, respectively. Despite stable production costs and improved margins for producers, the anticipated production boost did not materialize, further exacerbated by adverse weather conditions.
On the import side, data from Secex show that dairy imports decreased by 25.2% in August, totaling 187.8 million liters. This drop in imports has added pressure to the domestic supply, contributing to the sustained rise in milk prices.
Despite the 32% real increase in producer prices since the beginning of 2024, the average price for the January-August period stands at BRL 2.53 per liter, 8.4% lower than during the same period last year. Earlier projections had suggested a decline in milk prices for the third quarter of 2024, driven by increased production margins and stable demand due to lower retail prices. Additionally, the influx of high-volume imports had been exerting downward pressure on prices throughout the supply chain. However, milk production has not risen as anticipated.
The Brazilian Institute of Geography and Statistics (IBGE) released its Quarterly Milk Survey in mid-August, showing that raw milk production decreased by 6.2% in the second quarter compared to the first quarter of this year. Nonetheless, production did edge up 0.8% when compared to the same quarter in 2023.
The Cepea Milk Production Index (ICAP-L) recorded a 5% increase in production between July and August. However, key dairy-producing regions such as Minas Gerais and Goiás saw more modest gains, with increases of 2.8% and 1.5%, respectively. Despite stable production costs and improved margins for producers, the anticipated production boost did not materialize, further exacerbated by adverse weather conditions.
On the import side, data from Secex show that dairy imports decreased by 25.2% in August, totaling 187.8 million liters. This drop in imports has added pressure to the domestic supply, contributing to the sustained rise in milk prices.
