Brazilian Milk Prices Climb for Sixth Consecutive Month Amid Production Decline
Source: The DairyNews
In Brazil, the price of milk recorded in April marked a significant increase, reaching BRL 2.4576 per liter according to the "Brazil Average" net, up by 5.1% from the previous month. This adjustment represents the sixth consecutive monthly rise, with a report from Cepea highlighting a robust 18.7% increase in real terms for the year, adjusted for inflation using the IPCA as of April 2024.
The ongoing price surge is closely tied to a decrease in milk production. The Cepea Milk Production Index (ICAP-L) noted a 0.37% drop from March to April, with a cumulative decrease of 7.8% throughout 2024. Contributing factors to the reduced milk supply include low investment at the end of the previous year, the off-season in the Southeast and Central-West regions, and delays in the South due to unfavorable weather conditions.
The reduced availability of raw milk has intensified competition among dairy companies and cooperatives as they vie to secure adequate supplies, which in turn continues to drive prices upward. This trend is expected to persist into May, further fueled by significant price hikes in the spot market and market speculation following flood impacts on dairy activities in Rio Grande do Sul. However, this upward trajectory might start to weaken as of June.
Additionally, data from Secex reveals a notable increase in milk imports, with nearly 774 million liters recorded from January to April, marking a 15% increase compared to the same period in the previous year.
The reduced availability of raw milk has intensified competition among dairy companies and cooperatives as they vie to secure adequate supplies, which in turn continues to drive prices upward. This trend is expected to persist into May, further fueled by significant price hikes in the spot market and market speculation following flood impacts on dairy activities in Rio Grande do Sul. However, this upward trajectory might start to weaken as of June.
Additionally, data from Secex reveals a notable increase in milk imports, with nearly 774 million liters recorded from January to April, marking a 15% increase compared to the same period in the previous year.
