With less income, milk consumption drops 10% and the sector predicts the worst year in history

The drop in supermarket sales indicates that milk consumption will fall to 10% in 2021 and the year should end with the worst performance in history for the sector. The projection is from the Brazilian Association of Long Life Dairy Industry (ABLV) which expects to process around 6.5 billion liters of UHT milk, which is sold in a long life box.

With this result, the average annual consumption per Brazilian should drop almost 3 liters compared to 2020. “25 years ago the sector grew year after year, and we should end the year with a retraction between 8% and 10%. It’s a frightening drop”, says the president of ABLV, Laércio Barbosa. The estimated contraction of the sector was anticipated by the “Economic Value” and confirmed to the CNN Brasil Business.

The historical series of the entity shows only one year with a drop in sales: 2018, when there was a stoppage of truck drivers. Even so, that retraction was more modest, of 2%. Barbosa attributes the drop in consumption this year to the drop in Brazilian income, especially with the end of emergency aid, and also to the increase in costs and prices in the sector.

“Since the beginning of the pandemic, the price of dairy products has risen about 30%, basically almost everything in the last year. Even so, sales remained strong last year because of the emergency aid”, he says.

In 2021, however, the effect of the aid began to decrease – with fewer beneficiaries and a lower amount – until the program reached the last payment in the last few days. Given the numbers, Barbosa says that the demand for dairy products, especially milk, was directly linked to the payment of emergency aid during the pandemic. The sale of condensed milk in long-life box should fall 20% in the year”, says the Executive.

He also notes that some segments of refrigerated dairy indicate even worse numbers. “Some yoghurts have shown a drop of more than 20%”. With sales declining, producers have been keeping higher than normal stocks and directing more raw material to the production of cheese. In addition, the executive says that the industry has been trying to reduce costs with producers who have cattle and sell milk to factories.