After six consecutive drops, the price of milk to producers has a third increase in January, points out USP | Piracicaba and Region

After six consecutive falls in 2023, the price of milk for producers had, in January 2024, the third increase in a row, of 4.5%and reached the value of R$ 2.1347 per liter in the net “Brazil Average”.

This is what data from the Center for Advanced Studies in Applied Economics (Cepea), the Luiz de Queiroz College of Agriculture (Esalq), the campus of the University of São Paulo (USP) in Piracicaba (SP) point out.

Despite the rise, the average is 23.3% below that recorded in January 2023 in real terms. The values ​​were deflated by the Broad National Consumer Price Index (IPCA) of January 2024.

According to the Esalq/USP study center, the reason for the increase in producer prices is the lower production in the field. “Which, in turn, has intensified the dispute between dairy products and cooperatives for suppliers”, points out Cepea.

Cepea’s Milk Capture Index (ICAP-L) fell 1.85% from December to January. In the accumulated period between November 2023 and January 2024, funding fell by 4.1%.

“On the one hand, drought and heat are factors that have negatively influenced production since September last year”, he points out.

“On the other hand, the squeezed margins of livestock farmers caused a reduction in investments within the farm, reinforcing the scenario of limited supply at this time”, indicates Cepea.

According to the USP study center, the expectation is that raw milk prices will continue to rise in the coming months. However, consumption and imports can influence this scenario.

The consumption of derivatives, at the end of the chain, is influenced by the increase in product prices.

“In this sense, dairy products have had difficulties in passing on the increase in raw materials in negotiations with distribution channels”, points out the study center.

“At the same time, dairy imports continue to add significant volumes, putting pressure on prices in the domestic market”, adds Cepea.

The average price of raw milk paid to producers fell by 30.4% in one year, according to research released by Cepea in November 2023. The value of a liter of product captured by dairies in October last year reached R$ 1.96. In October 2022, the price was around R$2.56.

In the comparison between September and October 2023, the real drop in the average price of milk to producers was 4.3%. It was the sixth consecutive drop recorded in 2023, according to the net “Brazil Average”.

In real terms, in the first ten months of 2023, from January to October, the price of raw milk paid to producers fell 24.8%, the values ​​were deflated by the October IPCA.

The uninterrupted downward movement began in May 2023. The decline in the price captured by dairy products is explained by the greater domestic availability of dairy products – both due to the increase in domestic production and the growth in imports.