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.
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.