Milk and mozzarella cheese should be cheaper in September, says survey

Regular shoppers have followed the rise in dairy prices in recent months. The expectation, now, is a drop for the month of September.

The price of UHT milk recorded an accumulated drop of 17.3% and that of mozzarella, 10.8%, from the first half of July to the same period in August, in negotiations between dairy producers and distribution channels. This is the biggest cumulative drop in recent weeks.

The data, given exclusively to the CNN Brazil are monitored by the Center for Advanced Studies in Applied Economics (Cepea) in partnership with the Organization of Brazilian Cooperatives (OCB).

Cepea researcher Natália Grigol explains that the drop is due to the reduction in consumption, due to the high value of the products on the shelves.

The upward movement in dairy production prices, seen most intensely in the first half of July, has been weakening.

“We have seen more than 20 days of consecutive declines in the prices of dairy products negotiated by the industry with distribution channels,” says Grigol.

Producers have been facing the peak of the off-season, a period that traditionally does not have favorable weather conditions for production. This year, the cycle was more intense. Among the negative effects for the crop are climate changes caused by the La Nina phenomenon, which causes drought in pastures and disrupts animal feed — in a context of high inputs.

The researcher also highlights a trail of disinvestment in the sector that leads producers to leave the activity — a structural change that further restricted Brazilian production. These and other factors raised production costs. Consequently, taking a liter of milk home became more expensive.

In early July, the price of milk for producers rose 21.6%, compared to the previous six months, according to the Center for Advanced Studies in Applied Economics (Cepea) at the University of São Paulo (USP). The increase was mainly driven by the increase in the average cost of production, which has increased by 60% since 2020, due to the off-season period that affects pastures.

“The industry’s spirit is that prices will stabilize in August and, with the forecast of rains and a drop in grain prices, milk production will resume”, highlights Natália Grigol. Corn prices fell 0.44% from August 5th to the last Friday (12th) of this month, according to the ESALQ/BM&FBovespa indicator.

The specialist predicts that, in a month, the consumer can perceive the dairy products with lower prices in the markets.