Period: August 5 – 16, 2019
Milk production in South America has improved lately, principally because cooler temperatures have increased productive yields of dairy herds. However, poor pasture conditions are keeping milk volumes below expectations in Uruguay and a few dairy basins of Argentina.
In general, milk volumes are more than enough to cover most manufacturing needs. Demand for bottled and UHT milk is robust as most educational institutions are filling pipelines, while retailers are restocking shelves.
The strong soybean and corn harvest and the higher farmgate prices helped farmers’ financial positions. Nevertheless, consumer demand for some dairy products is weak, and manufacturers are faced with the dilemma of either paying prices that cannot be fully offset by returns from current sales, or having to lower pay prices to farmers and risk losing milk suppliers to competitors.
SMP export prices adjusted steady to lower in South America. Higher milk production boosts SMP production, which in turn is pushing down SMP values.
WMP export prices shifted down. The production of Whole Milk Powder has been more active, too, so the current WMP supply is above its demand. WMP exports are very active.