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Imea Predicts Normalization of Milk Prices in Brazil for 2024 Amidst Corn and Soybean Increases

Brazil 15.01.2024
Source: The DairyNews
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The Mato Grosso Institute of Agricultural Economics (Imea) forecasts a return to normal milk prices in Brazil for 2024, aligning with the expected increases in corn and soybean prices. The annual bulletin on milk by Imea highlights a projected reduction in soy and corn production in the 2023/2024 crop in the state, anticipating a subsequent rise in the prices of these inputs. To sustain activity margins, it is anticipated that milk prices will follow this upward trend.
Imea Predicts Normalization of Milk Prices in Brazil for 2024 Amidst Corn and Soybean Increases
The year 2023 witnessed a decline in milk prices in Brazil, primarily influenced by an upsurge in domestic supply from dairy imports. Additionally, there was a deviation from the usual seasonality of prices, as they increased from May to September (off-season), a phenomenon not observed in Mato Grosso last year.

Imea's analysis emphasizes that the reduction in soy and corn production is a key factor influencing input prices, consequently impacting the dairy sector. The institute expects milk prices to align with the increased costs of these inputs to maintain the economic viability of dairy farming.

Projections from the Global Dairy Trade auction (GDT) indicate international price advancements in 2024. Coupled with government measures aimed at discouraging significant foreign purchases by Brazil, these circumstances are expected to contribute to the normalization of milk prices in the country. This positive trend is anticipated to resume seasonality in 2024, as the price paid to producers aligns with the movement and average price observed over the past eight years.

Imea notes that the first quarter of 2023 may witness a lateralization of the value received by producers, reflecting the increase in milk supply due to improved pasture quality during the rainy season. The overall outlook suggests a balanced trajectory for milk prices in Brazil, offering relief to producers and supporting the economic sustainability of the dairy industry. Keep an eye on further developments as the year progresses.
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