Period: February 3 – 14, 2020
During the end of 2019 and the beginning of 2020, the southeast region of Brazil suffered of dry weather, which reduced the volume and quality of fodder in many dairy farms. As a result, milk cow production fell considerably during that time.
Brazil-0.15% milk production December 2019 y-o-y
Currently, farm milk output in Brazil is steadily recovering as sporadic rains benefited pasture and emerging corn in some key dairy basins and crop areas throughout south-eastern Brazil.
Despite the recovering in production, raw milk supply remains short, below levels from the previous year, reflecting relatively high prices supported also by a strong demand among dairy manufacturers.
In Argentina and Uruguay, the mild weather favoured development of corn and soybean crops and helped to boost forage quality and volume in several dairy farms.
Farm milk production has stabilized, but is expected to improve ahead of the fall season. Fat/protein milk components remain at low levels, contributing to higher cream premiums paid by buyers.
Raw milk intakes are still adequate to fulfil most requests from manufacturers of bottled/UHT Milk, Cheese, and Yogurt. In contrast, cream supplies are very tight, while demands from butter churners, ice cream, and milk caramel processors continues to be strong.
In terms of production, SMP manufacturing is more active compared to the previous month, with more inventories available in the market. On the other hand, there is stable production of WMP, with several buyers that are adopting a wait and see approach before making any purchase or sign any contract.
In South America, export prices for SMP and WMP moved down. Some dairy operators attribute the drop in prices to the effect of Coronavirus in the international markets. In addition, for the WMP, other contacts suggest that also the new Argentinian export tariff is putting pressure on prices. However, it is not yet known, with certainty, what awaits for these markets.