Higher Imports and Input Costs Pressure Minas Gerais Dairy Farmers
Cepea reported that the average price paid in September for milk delivered in August in Minas Gerais rose by 0.71% from the previous payment, remaining broadly unchanged at R$3.044 per litre. After eight consecutive increases, Conseleite MG indicated a 1.8% decline in the provisional reference price for milk delivered in September and paid for in October.
The movement in producer prices has coincided with weaker prices for dairy products. Mariana Simões, agribusiness manager at Sistema Faemg Senar, said that lower sales and prices reduced processors’ ability to pay farmers in September. Average prices fell by 1% for powdered milk, 1.7% for UHT milk and 2.9% for mozzarella.
“We have seen a decline in the sale of important products, such as UHT milk and powdered milk,” Simões said. “In September, this was reflected in lower prices for these products and also in the industry’s ability to pay producers. Last month we saw an indication of almost stable prices for milk paid to producers, and now, for the October payment, Conseleite MG already indicates a 1.8% decline for milk delivered in September.”
Imports have also remained a factor in the domestic market. Cepea said Brazilian dairy imports fell by 2.54% between July and August, to 230.3m litres in milk equivalent. The August volume was nevertheless almost 40% higher than in August 2025. Powdered milk accounted for 72.3% of imports, or 166.58m litres in milk equivalent, up 0.99% from July. Cepea said the continued inflow of imported products was increasing supply available in Brazil and limiting support for domestic prices.
The decline in wholesale prices had not yet produced an equivalent reduction for consumers, according to Simões. Dairy products recorded 6.18% inflation over the 12 months to August, compared with 4.22% for the overall IPCA consumer-price index in the same period. Simões said that “this fall, at first, has still not reached the consumer”.
Production costs increased during the same period. Embrapa’s Milk Production Cost Index rose by 1.47% in August and by 3.73% over 12 months. In Minas Gerais, average corn prices increased by 7.4% in September compared with August, while soybean prices rose by 10.4%. Simões said that efficiency and production and financial planning were necessary for farms to remain in dairy production amid fluctuations in prices and costs. She also said that weather conditions could affect the market during an El Niño year.
Simões said that increased production and continued imports could result in more stable or lower prices in the second half of the year, potentially through the end of the year as the season progresses. She added that production growth in 2026 had been more limited than usual.
