Cepea Report: Brazilian Milk Prices Show Third Consecutive Monthly Increase
Source: The DairyNews
In its recent market report, the Center for Advanced Studies in Applied Economics (Cepea) revealed that the price of milk in Brazil experienced a 4.5% rise in January compared to the previous month.
This marks the third consecutive monthly increase, with the net "Brazil Average" calculated by Cepea reaching an average of BRL 2.1347 per liter. Despite this positive trend, the current price remains 23.3% below the January 2023 level when adjusted for inflation using the IPCA from January 2024.
The upward trajectory in prices is attributed to lower milk production, intensifying competition among dairy companies and cooperatives for suppliers. The Cepea Milk Production Index declined by 1.85% between December and January, experiencing a 4.1% drop from November 2023 to January 2024.
Adverse weather conditions, specifically dry and warm weather since September of the previous year, have contributed to decreased production. Additionally, constrained profit margins for producers have resulted in reduced investments, further limiting the current milk supply.
Cepea's market survey indicates that industry players anticipate a continued increase in milk prices in the coming months. However, two factors may impede substantial increases: consumer consumption behavior and high levels of milk imports. Stakeholders highlight the vulnerability of final dairy product consumption to price hikes. Simultaneously, the robust presence of imports in the market is exerting downward pressure on domestic price quotations. Cepea's findings shed light on the delicate balance between rising production costs and market dynamics influencing milk prices in Brazil.
The upward trajectory in prices is attributed to lower milk production, intensifying competition among dairy companies and cooperatives for suppliers. The Cepea Milk Production Index declined by 1.85% between December and January, experiencing a 4.1% drop from November 2023 to January 2024.
Adverse weather conditions, specifically dry and warm weather since September of the previous year, have contributed to decreased production. Additionally, constrained profit margins for producers have resulted in reduced investments, further limiting the current milk supply.
Cepea's market survey indicates that industry players anticipate a continued increase in milk prices in the coming months. However, two factors may impede substantial increases: consumer consumption behavior and high levels of milk imports. Stakeholders highlight the vulnerability of final dairy product consumption to price hikes. Simultaneously, the robust presence of imports in the market is exerting downward pressure on domestic price quotations. Cepea's findings shed light on the delicate balance between rising production costs and market dynamics influencing milk prices in Brazil.
