Milk prices paid to Brazilian producers soar 6.16% in April

Publish time: 8th May, 2014      Source:
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May 8, 2014


Milk prices paid to Brazilian producers soar 6.16% in April


Milk prices paid to producers soared 6.16% in April, reaching BRL1.0838 (US$0.49) per litre (gross price including freight and taxes), regarding the "Brazil average", an increase of BRL0.0630 (US$0.03) per litre compared to March, according to the Centre for Advanced Studies on Applied Economics (CEPEA).



This was the second month in a row of price rises, a result of the smaller milk production in March, due to the beginning of the off-season period.


In real terms (IPCA March 2014), the net price (disregarding freight and taxes) averaged BRL0.9995 (US$0.45) per litre, 6.11% more than the month before, and 7.77% higher compared to that in March 2013. The averages are weighted by the volume purchased in Bahia, Goiás, Minas Gerais, Paraná, Rio Grande do Sul, Santa Catarina and São Paulo States in March.


Players surveyed by CEPEA say that this increase is attributed mainly to the production drop in March, because of the off-season beginning in some producing regions and the stepping up of this scenario in others, such as South Brazil. This smaller supply pushes up the competition for raw material among companies, with a consequent price rise.


Therefore, the Index for Milk Purchases (ICAP-Leite Cepea) dropped sharply 3.85% from February to March. Even the occurrence of rains in some areas in the Central-Southern region was not enough to recover pasture areas affected by the dry weather in previous periods. Moreover, since March, pastures in Central-West and Southeast regions are less productive.


In the by-products market, values kept the upward trend in the partial April (until April 29). In the average of the wholesale market in São Paulo, ultra-high temperature (UHT) milk and mozzarella cheese prices rose 3.3% and 1.97%, respectively, from March to April.