Milk imports reached a record in the last 13 years. Producers concern over farmgate prices

In October, Brazil should import the largest volume of milk in the last 13 years. Daily imports this month are growing 5% compared to September, when internalizations had already been the highest since September 2016.

Milk imports in October were contracted one or two months behind. Due to the dollar influence on import demands a downtrend is expected for the inflows to fall in the short term. In July, however we had a very high price in the domestic market that offset intentions in the market, and that even despite the dollar strenght, imported goods were stimulated.

Milkpoint says that imports and the retraction of UHT milk and mozzarella demands have affected the spot milk market already, impacting directly the price paid to the producer as of the November payment.

To further complicate the situation of the producer, the local sourcing inputs hardship is increasing the pressure and imports of those (soy bran and corn)are highly discouraged by the strong dollar. In an attempt to circumvent the higher costs, producers have been looking for substitutes. We may see in the next weeks DDGS being addressed to those producers to keep costs at bay.