Brazil’s Milk Market Reverses Course as Supply Tightens
Brazil’s dairy market changed direction between 2025 and 2026. The national average price paid to farmers fell for seven consecutive months through October 2025, when it stood at R$2.30 per litre. It then recorded four successive monthly increases through April 2026, reaching R$2.66 per litre in May.
The supply data moved in the opposite direction. ICAP-L reported a 13.6% year-to-date increase in milk collection through November 2025. In 2026, collection declined by 11.1% in the first quarter and by 13.7% cumulatively through May. Formal collection recorded by Brazil’s statistics agency IBGE rose by 2.7% in the first quarter, but that increase slowed to 1% in the second quarter.
The higher farmgate price has not restored the previous year’s real value. In May 2026, the average price was 3.8% below the figure for May 2025 after adjusting for inflation.
Prices for processed dairy products also changed during the period. The Cepea Milk Bulletin described December 2025 as the month with the year’s lowest prices. Compared with December 2024, real prices fell by 24.4% for UHT milk, 15.2% for mozzarella and 12.7% for powdered milk.
By June 2026, wholesale prices for mozzarella and powdered milk in São Paulo were described by Cepea as remaining firm. UHT milk was still declining, with the bulletin attributing that movement to final demand that remained sensitive to price.
Imports increased during the same period. Brazil imported the equivalent of 211m litres of milk in June 2026, up 35.2% from June 2025. International prices also weakened in one Global Dairy Trade auction, when the index fell by 4.9%, its largest decline of the year.
The source compared Brazil’s position with that of Europe, where milk supply was described as excessive and the market as stable because the decline in the price curve had stopped. In Brazil, supply was described as tighter and market conditions improved as the price curve turned upwards. The source identified the point shared by the two markets as the stabilisation of the curve rather than the volume of milk itself.
