The price of milk collected in December and paid to producers in January remained practically stable in the net “Brazil Average” of the Center for Advanced Studies in Applied Economics (Cepea). The value was R$ 2.5214/liter, a decrease of 0.3% compared to the previous month.
“Despite this, the average for this month was still 13.7% higher than that recorded in January/22, in real terms, and is also the highest for a month of January, considering Cepea’s historical series, which began in 2004 (values deflated by the IPCA of December/22)”, states the study center in a note.
“It is worth noting that the average values of Minas Gerais, Paraná and Santa Catarina registered drops of less than 1%, while those of São Paulo and Bahia showed drops of more than 2%. On the other hand, the averages in Goiás and Rio Grande do Sul increased, but the variations were below 1%”, states the center. Cepea estimates that producer prices may rise starting this month, with lower production.
UHT milk and mozzarella
According to Cepea, the slowdown in the downward movement in farmgate prices (which has been occurring since September) can be explained by the transition period observed in December: “on the one hand, demand at the end of the chain remained weak and put pressure on dairy prices; on the other, capture was more limited”.
From November to December, the average prices negotiated for UHT milk and mozzarella between industries and distribution channels in the state of São Paulo fell 7.2% and 6.2%, respectively. Demand remained weak, which put pressure on prices.
“The more adverse weather and the narrowing of producers’ margins are factors that explain this scenario” — Cepea
“As for supply, the off-season in the South of the country advanced, and production did not grow as expected in the Southeast and Midwest. The more adverse weather and the narrowing of producers’ margins are factors that explain this scenario”, said Cepea.
Cepea’s index
The Cepea Milk Collection Index (ICAP-L) fell 0.15% from November to December in the Brazilian Average. In the Southern States, the average decline was 2%, while in the Southeast and Central-West States the increase was only 1%. “Market agents reported that competition for suppliers has increased again. In this context, the companies’ strategy regarding producer pricing in December was more heterogeneous, both in the intensity of the pass-through of the drop and in the differential practiced in relation to the production ranges.”
Source: Canal Rural