Milk and mozzarella prices should continue to fall, survey shows

With the arrival of spring rains, the increase in the dairy industry, the weakening of demand and greater imports, the prices of dairy products should continue to fall, points out a study by the Center for Advanced Studies in Applied Economics (Cepea).

The price on the shelves of long-life milk, which had risen 25.46% in July, dropped 1.78% in August, according to the latest Broad Consumer Price Index (IPCA) of the Instituto Brasiliero de Pesquisa e Estatística (Brazilian Institute of Research and Statistics). IBGE). And the devaluation scenario should not only remain, but intensify at the end of this year, according to Natália Grigol, a researcher at Cepea.

The monthly average price — between producers and distributors — of UHT milk in September this year dropped by 18.9% compared to August, a month that had already shown a reduction of 15.3% compared to July.

The same scenario is observed with the prices of mozzarella, which registered a devaluation of 18% in September and 15% in August.

In the first week of October alone, milk fell by 1.9% and mozzarella by 1.8%. The data, provided exclusively to the CNN Brasil Business are monitored by Cepea in partnership with the Organization of Brazilian Cooperatives (OCB).

The researcher explains the devaluation scenario by a sum of factors, with emphasis on the best weather conditions. The greater volume of rainfall in the spring increases the quality and availability of pastures, which brings a decrease in the cost of the producer in relation to animal feed — and this benefits the dairy activity and increases the level of production.

“With that, prices tend to fall in this last quarter of the year. We expect the downward trend in prices along the entire production chain to continue and intensify”, he adds.

The rise in the price of dairy in July increased the profitability of the producer, which was reflected in investment to capture — according to the expert’s analysis. The Milk Capture Index (ICAP-L) of Cepea pointed to an increase of 4.4%, from June to August, in the capture of dairy products.

This is the fourth consecutive advance of the sector, which has accumulated an increase of 6.3% since January. “We observed an increase in the capture of raw milk by the dairy industries, which means that the industries are supplying themselves with raw material”, he says.

Natália Grigol also highlights that dairy imports have increased in recent months: almost 60% increase in import volume since August this year. With greater supply, there is a reduction in prices.

In addition, weakened demand by higher prices balance the market. “Our expectation for the next data is that the September funding still shows an increase and the October quotations will register a new drop”, he adds.

Source: CNN Brasil

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