Brazil's Milk Prices Decline 1.5% in July Amid Rising Production, Cepea Reports
Source: DairyNews.today
Brazil's milk prices saw a 1.5% decrease in July, interrupting an upward trend that had been in place since November 2023, according to a report from the Center for Advanced Studies in Applied Economics (Cepea).
The average price for the month closed at BRL 2.7225 per liter on the “Brazil average," although prices remain 7.9% higher compared to July 2023, when adjusted for inflation using the IPCA index.
Despite the recent decline, milk prices have accumulated a 30.1% increase since the beginning of 2024. However, the average price from January to July this year—BRL 2.50 per liter—represents an 11.5% decrease from the same period in 2023.
The price drop in July is attributed to a surge in national milk supply. The Cepea Milk Production Index (ICAP-L) showed a 4.6% increase in July, driven primarily by production growth in key states such as Minas Gerais (+8%), Rio Grande do Sul (+4.7%), and Santa Catarina (+4.1%).
Increased production is the result of strategic investments in animal nutrition, which has supported higher output despite rising costs. Production costs rose by 0.62% in July, but producers’ profits still grew by 3.93% from June to July, according to calculations from Cepea in partnership with the Brazilian Confederation of Agriculture and Livestock (CNA).
Alongside the rise in local production, Brazil has also seen a sharp increase in dairy imports. In June, imports surged by 37.4%, totaling 251.1 million liters, which is 35.3% higher than the same period in the previous year, according to data from Secex. The increased imports have further bolstered the availability of dairy products in the domestic market, adding to the downward pressure on prices.
As the market continues to adapt to these shifts in both domestic production and import levels, stakeholders will be closely watching the effects on profitability and pricing trends throughout the remainder of the year.
Despite the recent decline, milk prices have accumulated a 30.1% increase since the beginning of 2024. However, the average price from January to July this year—BRL 2.50 per liter—represents an 11.5% decrease from the same period in 2023.
The price drop in July is attributed to a surge in national milk supply. The Cepea Milk Production Index (ICAP-L) showed a 4.6% increase in July, driven primarily by production growth in key states such as Minas Gerais (+8%), Rio Grande do Sul (+4.7%), and Santa Catarina (+4.1%).
Increased production is the result of strategic investments in animal nutrition, which has supported higher output despite rising costs. Production costs rose by 0.62% in July, but producers’ profits still grew by 3.93% from June to July, according to calculations from Cepea in partnership with the Brazilian Confederation of Agriculture and Livestock (CNA).
Alongside the rise in local production, Brazil has also seen a sharp increase in dairy imports. In June, imports surged by 37.4%, totaling 251.1 million liters, which is 35.3% higher than the same period in the previous year, according to data from Secex. The increased imports have further bolstered the availability of dairy products in the domestic market, adding to the downward pressure on prices.
As the market continues to adapt to these shifts in both domestic production and import levels, stakeholders will be closely watching the effects on profitability and pricing trends throughout the remainder of the year.
23.09.2024
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