Period: June 8 – 19, 2020
During the past couple of weeks, mild climate conditions in Argentina and Uruguay stimulated the development of crops, and in particular Corn. In addition, the lower temperatures have improved milk yields.
Brazil-5.04% farm gate milk prices May 2020
In Brazil, milk production is declining as dairy farmers are generally discouraged by lower farm gate prices and higher concentrate costs during the current coronavirus crisis.
At the time being, South America is one of the epicenters of COVID-19. Most dairy processors are hesitant to purchase additional loads of milk, limiting manufacturing of some dairy products, such as Cheese, UHT Milk, and Milk Powders. In this way, prices are increasing on a business-to-business level.
At the retail level, sales of bottled Milk, Yogurt, Butter, and Cheese, are expected to remain active, driven by emergency assistance programs in some countries, such as Brazil.
In South America, market uncertainty due to Covid-19 emergency has limited the availability of milk for dryers and consequently lowered the SMP production. With less availability of skim milk powder in the market, export prices have increased during the last weeks.
The situation is similar for WMP. The limited production and the market uncertainty have led to an increase in WMP prices. Overall, the demand for WMP is above its supply.