Brazil milk price drops 5.7% in July - CEPEA

It's the third consecutive monthly decrease
calendar icon 13 September 2023
clock icon 2 minute read

The price of the milk collected by Brazilian dairy plants in July dropped for the third consecutive month, according to a market report from Brazil's Centre for Advanced Studies on Applied Economics (CEPEA). 

Cepea surveys show that the monthly average closed at BRL 2.4142/liter on the net “Brazil average” in July, 5.69% lower than that from June and 35% below that from July/22, in real terms (the monthly averages were deflated by the IPCA from Jul/23).

It is important to highlight that milk prices at this time of the year is atypical for the sector, since values usually rise because of the offseason, when production is not favored by the weather. However, in 2023, prices have been atypical, due to weak consumption, higher imports and lower production costs. These factors, altogether, are leading to devaluations all over the productive chain.

Cepea surveys in partnership with OCB show that the prices for UHT milk, powdered milk (400g) and mozzarella cheese paid by distributors to dairy plants in São Paulo State dropped 2.1%, 5.9% and 3.7% between June and July. Compared to the same period last year, these by-products have devalued 35.8%, 23.9% and 36.4%, in real terms (values were deflated by the IPCA from Jul/23).

Higher imports this year are raising the domestic supply of dairy products, pressing down prices in Brazil. Although data from Secex show that the volume imported in July decreased 12% from that in June, it totaled 185 million liters (milk equivalent), a staggering 71% up from that imported in the same period last year. And as the prices of the products imported have been more competitive than domestic prices, imports have been firm.

(BRL 1 = USD$ 0.20)

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