Cepea, 30 – After rising for seven consecutive months and reaching real records, the price of milk to producers fell in September. In addition to the increase in funding, observed in most states for the third month, weak domestic demand were the main reasons for the drop in values. According to research by Cepea (Center for Advanced Studies in Applied Economics), Esalq/USP, the average price received by the producer in the “Brazil average” (without shipping and taxes) was R$ 1.5257/liter, a reduction of 3.2% (or 5.1 cents) in relation to August. Even with the drop, the price still accumulates an increase of 50.8% in the year, in real terms (values deflated by the IPCA of August/16). The average gross price of milk (which includes shipping and taxes) also fell by 3.2% month to month, falling to R$ 1.6377/liter in September. The averages calculated by Cepea are weighted by the volume captured in August in the states of GO, MG, PR, RS, SC, SP and BA.
Milk capture increased in almost all of the states analyzed, reflecting the recovery of pastures, favored by the arrival of rain in some regions, and the beginning of the harvest in the South of the country. From July to August, the Cepea Milk Capture Index (ICAP-L/Cepea) increased a significant 6.2%, with emphasis on Santa Catarina and Rio Grande do Sul, with significant increases of 11.76% and 11.37%, respectively. The exception was Bahia, where the volume captured remained practically stable (slight drop of 0.08%), supporting prices.
For October, dairy/cooperative representatives consulted by Cepea point to a further drop in milk prices. The majority of agents interviewed (96.2%), which represents 99.8% of the milk sampled, indicate that there will be a drop in values. Another 3.8%, which represents 0.2% of the sampled volume of milk, believes in stability. Nobody expects prices to rise next month.
In the derivatives market, weakened demand, given the high price levels in recent months, and high stocks in some regions, put pressure on the values of dairy products. The average prices of UHT milk and mozzarella cheese traded wholesale in São Paulo in September were R$ 2.49/liter and R$ 19.20/kg, respectively, drops of 23.1% and 8.41% compared to the August averages . With the scenario of intense falls in the last two months, the accumulated variation in UHT milk since the beginning of the year rose to 6.3%. Research into Cepea derivatives is carried out daily with dairy products and wholesalers and has financial support from the Organization of Brazilian Cooperatives (OCB).
Graph 1: ICAP-L/Cepea – Milk Intake Index – AUGUST/16. (Base 100=July/2004)
Source: Cepea-Esalq/USP and PTL-IBGE.
Table 1. Prices paid by dairy products (gross) and received by producers (net) in SEPTEMBER/16 for milk delivered in AUGUST/16.
Source: Cepea-Esalq/USP.
Table 2. Prices in states that are not included in the “Brazil average” – RJ, MS, ES and CE
Source: Cepea-Esalq/USP.
Graph 2: Series of average prices paid to producers – deflated by IPCA
Source: Cepea-Esalq/USP.
Source: Cepea
