Brazil milk prices continue to rise - Cepea

 Brazil milk prices continue to rise as supply has not increased as expected, according to a recent market report from Cepea. 

The average price in August was at BRL 2.7607/liter on the “Brazil average”, moving up 1.4% against the month before and 17.7% compared to that in August/23, in real terms (IPCA August). Although values paid to producers have accumulated a real increase of 32% since the beginning of 2024, the average from January to August this year (BRL 2.53/liter) is 8.4% smaller in relation to that in the same period last year.

Up to early August, milk prices were likely to decrease in the third quarter of this year. The production seemed to be favored by the increase of producers’ margins, while the demand continued to be driven by low prices in the retail market. Imports were at high volumes, pressing down quotations in the entire chain. However, production has not increased as expected by players.

IBGE’s Quarterly Milk Survey, released in mid-August, indicated that the raw milk production in Brazil dropped 6.2% in the second quarter against the first. In relation to the same period last year, the increase was 0.8%.

Between July and August, the Cepea Milk Production Index (ICAP-L) upped 5%, but the increase in Minas Gerais was 2.8% and in Goiás, 1.5%. Despite the fact that producers’ margins rose over the last months and that production costs are relatively stable, this scenario has not encouraged the sector as expected, and severe weather conditions did not help.

Data from Secex indicate that dairy imports decreased 25.2% in August, totaling 187.8 million liters.