Cepea, July 2 2019 – Milk prices paid to Brazilian dairy farmers remained practically stable in June, closing at 1.5278 BRL per liter on the net “Brazil average”, only 0.68% up compared to that from May, but 13.9% higher in relation to that registered in June/18 (values were deflated by IPCA May/19), according to Cepea surveys. Exceptions to the stability were Paraná and Rio Grande do Sul, where monthly averages rose 2.93% and 2.86%, respectively, from May to June.
Prices have increased 21.1% since the beginning of the year on the net “Brazil average”, because of the fierce competition between companies to purchase the raw material and the lower supply in the first semester. The low volume of rains in the Southeast and Central-West in Brazil and the lower quality of pastures have limited the availability of milk. Moreover, producers fear to make new investments in the activity, because of the reduction in the purchase power of Brazilians and the oscillations of milk prices over the last two years, scenario that affect investments and have results in the long term.
However, dairy companies face difficulties to transfer price rises of the raw material to consumers, because of the slow pace of the economy. The increase of the competition between dairy companies in sales of byproducts has limited the margin of the industry. For the next months, players expect gradual decreases for milk prices paid to farmers.
25TH ANNIVERSARY OF MILK PRICE SURVEY – In July 2019, the survey of milk prices by Cepea completes 25 years. The price gathering started in July 1994, focused on gross values in Minas Gerais, Goiás, São Paulo, Paraná and Rio Grande do Sul. In this period, the price gathering improved sharply and Cepea is proud to participate in the evolution of the sector in Brazil.
Coordinated by professor Sergio De Zen, Cepea Milk Team maintains research performed daily, monthly and every fortnight about prices at the field and the industry. Currently, more than 35 thousand data are collected every month. As for milk prices paid to farmers, Cepea sample represents, on average, 30% of the IBGE Quarterly Survey of Milk for the seven states that are part of the “Brazil average”. The Cepea research is only possible because players inform voluntarily their trades and counts on the financial support from OCB (Brazilian Cooperative Organization), Viva Lácteos and CNA (Brazilian Confederation of Agriculture and Livestock).