Milk demand higher than supply [News South America n°7/2020]

Period: March 30 – April 10, 2020

In Argentina most dairy cows are suffering from heat stress due to atypical high temperatures, limiting milk production.

Milk and cream intakes are not sufficient to satisfy all manufacturing needs. Some contacts say that due to stagnant milk production and an increase in demand, several processors are offering a premium for raw milk.
Due to the prolonged shelf life, UHT milk has been highly demanded during this pandemic. - Argentina farm-gate milk prices – Argentina farm-gate milk prices

In Brazil, farm milk production has decreased slightly. This drop is partially due to the unstable climate conditions, which have lowered cows’ milk yields.

Moreover, two other factors are affecting milk production: one of them is the high prices of concentrate (corn and soybean), as a result of the severe drought in some crop zones of the country. The other factor is the increase of dairy cows’ slaughter, driven by a solid beef cattle market.

Also in Brazil, milk and cream volumes remain below the high demand from the food processing industry, boosting farm gate prices.

The demand for bottled milk, especially UHT, is very strong at the retail level. On the contrary, cheese sales have dropped substantially, following the closure of most of the food services, forcing some processors to sell cheese at lower prices in order to prevent stock build-up.

Food production in South America is exempt from complying with mandatory and preventive social isolation due to COVID-19. Nevertheless, the country’s dairy industry personnel have been applying preventive practices without interrupting their usual business procedures.

SMP prices remain unchanged. Production is limited and most drying time is devote to WMP production. At the moment, COVID-19 is not playing a major role in this regional niche market.

WMP prices have adjusted higher. Due to lower regional manufacturing milk volumes, WMP processing has been slow, with dryers not running at full capacity. As a measure to mitigate COVID-19 spreading, some ports have been partially closed across Argentina, Chile and Uruguay, delaying some milk powder export shipments.

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Source: USDA summarized by the CLAL Team Note: assessments about market trend are expressed in US$ More informations about dairy market in Argentina, Brazil and Chile are available on

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The team is composed of young people who with the help of Computer Science study the dairy market and develop tools to provide the Operators of the dairy sector with a comprehensive real-time view of the national and international market trends.

Posted in Argentina_en, Brazil, News South America, South America