Brazilian Milk Market Sees Rising Prices and Falling Costs

In April, the Brazilian milk market experienced a noteworthy change as the price of milk at the origin increased for the fourth consecutive month, reaching R$ 2.6584 per liter, which is a 10.4% rise compared to March. This price increase is attributed to the reduced availability of milk due to seasonal factors and heightened competition among dairy processors for raw materials.

Despite the positive trend, the current price levels are still below those recorded in April 2025 in real terms. The recent developments suggest that the recovery in prices has not yet fully compensated for the losses incurred over the past year.

Simultaneously, operational costs began to decrease. In May, the Effective Operational Cost (COE) dropped by 1.39% on average across Brazil, marking the first decline since the start of 2026. This reduction was primarily driven by lower expenses related to animal nutrition and mechanized operations. Although the COE has still increased by 1.80% over the year, the monthly decline is significant for the profitability of milk production.

In the dairy products market, price behavior varied. While UHT milk prices fell, mozzarella and milk powder prices remained stable throughout May. Mozzarella averaged R$ 35.10 per kilo, and milk powder reached R$ 30.89 per kilo, both showing slight positive variations from the previous month.

The external trade sector also showed growth in May, with both imports and exports increasing compared to April, though export growth was more pronounced. Imports reached 226.21 million liters in milk equivalent, a 3.58% increase, while exports rose by 45.33%, totaling 5.81 million liters in milk equivalent.

However, compared to May 2025, import volumes have grown by 27.93%, whereas export volumes have remained below last year's levels. These indicators highlight a market still constrained by the limited supply of raw milk but beginning to show signs of economic improvement in production conditions.