Discover why Brazilian milk prices surged in April, despite remaining lower than last year. Uncover the factors influencing this trend in our Cepea report analysis.
When stepping into the dairy world of Brazil, you’ll find an interesting fluctuation in milk prices. Yes, in April we witnessed a rise. But, let’s not rush to conclusions just yet. While the average price of milk gave Brazilian producers a slight spring surge, increasing to BRL 2.3290/liter – about 4.1% up from February – the overall picture tells a different story. This figure, you see, remains 20.3% lower than what we saw in March 2023, according to fresh market data gleaned from Cepea.
“While milk prices do show an uptick in April, they’re still playing catch-up with last year’s figures, underscoring the volatility in the market and the beleaguered state of Brazil’s dairy industry.”
Stay tuned as we further unravel these numbers and their implications on both farmers and the wider dairy industry.
A Closer Look at the Numbers
Within the first quarter of this year, you’ll find that real-term milk prices have seen a rise of 12.9%. Quite a positive sign at first glance, right? But when you juxtapose this with the average of the initial three months of 2024, a stark contrast is drawn. This period shows a decrease of 21.7% compared to the same timeframe last year.
Here’s another intriguing tidbit: this marks the fifth consecutive month where we’ve seen an increase in the prices paid to our hardworking dairy farmers. And what’s the reason behind this? A tightening supply. As you cut through the data, you’ll find the culprits – unfavorable weather patterns such as dry and warm temperatures, coupled with reduced producers’ margins in the last quarter of 2023, have led to a decrease in investment and consequently, supply.
Effects on the Dairy Industry
This situation has been encapsulated in the performance of the Cepea Milk Production Index (ICAP-L). Just like a mirror, this index reflects the agrarian sector’s predicaments. In it, we see a descent of 2.5% from.5% throughout the first quarter. Now, let’s connect this with the bigger industry picture.
Can you feel the competitive tension? The scarcity of supply has turned the dairy market into a heated February to March and a more alarming overall slump of 7 battlefield. Dairy corporations and cooper and ensure aatives are out pulling all stops just to clinch their suppliers steady inflow of raw material. it devis Whether’sing attractive contracts or offering better – prices all strategies are put being in to the test this industry showdown.
A Fresh Peek at Byproduct Values
You’d think that as the prices for raw milk increase, so would the prices for byproducts, right? However, it seems that this isn’t exactly the case. Judging from data collected by Cepea, this surge in raw milk prices did not equally affect byproduct values. Specifically speaking, the wholesale market prices for UHT milk and mozzarella cheese in Sao Paulo only saw modest increases of 3.9% and a mere 0.3%, respectively, during the month of March. It’s truly fascinating how market dynamics unfold, isn’t it?
Imports and Exports: A Closer Examination
Let’s talk about imports now, shall we? Despite a sizeable shift in the dynamics of milk prices in Brazil, there’s been a slight 3.3% decrease in imports when comparing March rates to those of February. However, don’t let this minor drop deceive you. When performing a year-on-year comparison, this March’s import volume was still up by 14.4% compared to the same period last year.
Moving on to the broader perspective, the import volumes in the first quarter of 2024 were not left behind. Data shows that Brazil imported just shy of 577.5 million liters of milk – a noticeable 10.4% hike compared to the equivalent period in 2023! Intriguing, isn’t it, how these market factors intertwine?
