Milk market is upside down this year – 08/30/2023 – Shuttle

The milk market is upside down. In the middle of the off season, the supply of the product increases and prices fall. Traditionally, the opposite occurs at this time of the year.

The Cepea (Center for Advanced Studies in Applied Economics) found that the uptake of milk last month surpassed by 5% that of June, registering the fourth consecutive increase.

Real prices, on the other hand, fell to R$ 2.4142 in the national average, with a retraction of 5.7% in the month. Compared to a year ago, the accumulated drop is 35%.

Bad for the producer, good for the consumer. In the last 12 months, the price of long-life milk decreased by 22% in supermarkets in São Paulo. In the last 30 days alone, the drop was 2.1%.

The retraction in milk prices cooperated for a deflation in the average retail food prices. On average, the drop was 1.2% in the last 30 days.

The slowdown in food, a weight group in consumer costs, helped in the deflation of 0.5% for São Paulo residents in the last four weeks, according to Fipe (Fundação Instituto de Pesquisas Econômicas).

The drop in milk prices in the countryside is due to several factors, according to Cepea analysts. National consumption is weakened, which also generates a downturn in the chain of the sector.

International prices are more competitive than domestic ones and, as a result, imports have risen sharply. Although at a slower pace last month compared to June, external purchases reached 185 million liters of milk equivalent. The volume was 12% below that of June, but surpassed by 71% that of the same month of 2022.

The drop in grain prices, important in the composition of the feed, also reduced production costs in the dairy sector. Lower costs led part of the sector to invest more, which generates a greater supply of the product, according to Cepea. From January to July, the drop in costs was 6%.

Paying less in the field, the industry transfers the product at lower prices. In the last 12 months, long life milk fell 36% wholesale; powdered milk, 24%, and mozzarella, 36%.

The lowest price paid to milk producers occurred in Bahia, where negotiations took place, on average, at R$ 2.20 per liter. São Paulo, where the product was sold at R$ 2.65, had the highest values.

farming After a drop of 1.9% in July, the prices of agricultural products were stable in wholesale this month.

Farmers 2 Even with this stability, prices still accumulate a drop of 17% in 12 months, according to the FGV’s IGP-M.

Juice Brazilian stocks of orange juice dropped to just 85 thousand tons at the end of the 2022/23 harvest, the lowest level in the historical series. Ten years ago, they were at 766 thousand tons, according to CitrusBR.

Juice 2 This drop is due to a retraction in the supply of oranges in Brazil of 2.7 million boxes, in relation to the initial perspectives, losses of 8 million boxes in the harvesting process and deterioration of industrial yield, in addition to a drop in production in Florida .

Prices 1 This scenario of lower supply of raw material means that the current prices of juice on the New York Commodity Exchange are 71% higher than those of a year ago.

Prices 2 Internally, the value of the orange box rose 43%, according to data from Itaú BBA. Raw material costs increased by 50% in dollars.

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