The situation in Brazil dairy industry

In this time of the year, milk production starts to fall in many regions, since pasture growth is lower. This, coupled with a change in consumption pattern (consumers going to supermarkets to buy goods that can be stored, such as UHT milk, milk powder and certain cheeses), are leading to a short term increase in milk prices. Also, our currency has lost value since January, from a R$ 4-US$ 1 to more than R$ 5-US$ 1. Even with the recent retraction in international prices, imports are currently not competitive.

However, this may be a short term situation. Companies are already firing people and unemployment will rise, reducing the purchasing power of the population. This will affect consumption, but it is early to quantity it. At this point, we don't know the extent income will be affected and what will be consumer choices. Durable goods will suffer much more, as well as travel, clothing, beauty, etc. Maybe consumer will focus on more essential goods and in this case food will suffer less.

Marcelo P. Carvalho, CEO - AgriPoint.  Special for The DairyNews.ru