El Niño May Pressure Dairy Margins in Bahia
Milk producers, technicians and researchers met in Miguel Calmon, in Bahia, for a presentation on the economics of dairy farming in Brazil’s Northeast. The findings were presented by Giovanni Penazzi, a researcher at the Center for Advanced Studies in Applied Economics (Cepea), during a results session of the Campo Futuro project.
Penazzi said farms in the region often struggle to produce enough milk to spread their fixed expenses across a larger output. Bahia’s dairy activity is relatively competitive compared with other parts of the Northeast, he said, but raising productivity remains a central issue. Spending on animal nutrition and the cultivation of forage also contributes to production costs.
Forage production was identified as a particular concern in the agreste. Penazzi said that producing the main feed base could become more difficult under the conditions associated with the expected onset of El Niño. He linked that risk to producers’ ability to preserve the margins generated by dairy operations.
The meeting also examined how cost information should be used on farms. Rafael Ferraz, a technical consultant at Rehagro, said financial data should be connected to management choices and everyday operating practices. He argued that farmers need to know their cost position and use that information to guide decisions aimed at improving profit and returns.
Cau Batista, president of the Miguel Calmon Rural Union, said the event helped producers understand the figures behind their businesses and examine how their farms were being managed. “It is work that shows our reality and makes us reflect as producers on whether we are producing and doing our homework,” he said.
Humberto Miranda, president of Bahia’s Federation of Agriculture and Livestock and vice-president of the Confederation of Agriculture and Livestock of Brazil, addressed the region’s semi-arid potential at the opening. “The frontier of the world’s semi-arid regions is the most challenging, but also the most productive,” he said. Miranda called for soil management, animal preparation and greater organisation among producers.
The event was organised by the Confederation of Agriculture and Livestock of Brazil in partnership with Bahia’s federation. Its programme covered Northeast milk-production costs, the dairy market and supply-chain challenges, opportunities for farmers and dairies, and a round-table discussion. Representatives of rural unions, associations and research institutions also attended.
