While milk producers lament the reduction in the price paid for the product – with the fifth consecutive monthly drop -, consumers can celebrate the drop in prices on supermarket shelves.
In the city of São Paulo, whole long-life milk at retail was costing, on average, R$5.09 in the second half of October. The value represents a monthly drop of 1.1% and an annual variation of -19.7%, according to data collected by Scot Consulting.
“The reduction has been recorded since the first half of June and was mainly due to demand, which remains fragile, as the population continues to lack capital”, he assesses. Juliana Pilazootechnician and market analyst at Scot Consulting.
The expert also cites the increase in supply, generated due to imports, as one of the factors for the fall in the price of the product. She recalls that in the off-season there was a substantial increase in imports made in Brazil, generating a surplus in the product supply.
“Consumption has not been keeping up, so prices across the entire chain have fallen,” he concludes.
How does milk get to the shelves?
The milk chain begins on the rural property, which sends the product to the dairy, the sector responsible for the industrialization of the product, manufacturing UHT milk, butter and other derivatives. This sells the food to retail, reaching the final consumer.
Juliana highlights that the drop in wholesale was greater than in retail in the last 13 months, with a 1% drop in the monthly comparison for the first (wholesale) and a 0.5% drop in the monthly comparison for the second (retail).
In the first half of October, the price of whole long-life milk at retail was, on average, R$5.08, a fortnightly variation of 0.2%. In the second half of September, the same product cost R$5.15 to the end consumer in São Paulo, with a monthly variation of -1.1%.
Juliana believes that the outlook, until the end of the year, indicates that production tends to grow with the harvest period, increasing the supply of milk on the market. On the other hand, the analyst highlights that the end of the year is not a favorable period for the consumption of UHT milk.
“During the holiday period, people prefer juices, they tend to wake up later and skip breakfast”, he observes. For products with higher added value such as cheese, the period is favorable, as the 13th salary boosts sales in the segment.
Fall in Ponta Grossa
The drop in milk prices is also seen in other regions of the country. In Ponta Grossa (PR), a city close to Castro, one of the largest dairy basins in the country, a reduction in the value of milk has also been recorded.
Second Alexandre Roberto Lageseconomist at the State University of Ponta Grossa (UEPG) and coordinator of the Basic Basket Index In the municipality, milk, which is part of the general food group in the survey, has seen a reduction in price since June, when there was a drop of 5.06%.
In the last balance, released in September, the drop was 7.99%, with long-life milk being sold at an average price of R$4.53 in the city.
“Milk is a very seasonal product, taking into account the relationship between production and consumption. In summer, the tendency is to reduce consumption a little and increase supply”, considers Lages.
In the October index, which is being closed today (8/11), but has not yet been released, milk is among the products that registered a drop.
The research monitors the prices of food, hygiene and cleaning products in the delivery systems of supermarkets in Ponta Grossa, using as a basis the Family Budget Survey (POF). The products make up the basic consumption of families with, on average, three members and an income of one to five minimum wages.
According to Broad National Consumer Price Index 15 (IPCA-15)released on October 26th by IBGE, long-life milk is among the ten food products with the biggest drops in average price in 12 months, registering a variation of -17.1% in the country.
Fall in producer prices
At the other end is the milk producer, who has been facing a scenario with lower prices paid for the product.
Survey of Center for Advanced Studies in Applied Economics (Cepea) from Esalq/USP shows that the average monthly value of raw milk collected by dairies recorded the fifth consecutive drop. From August to September, the drop was 9.08%, going to R$ 2.0509 per liter in the net “Brazil Average”.
In one year (from September 2022 to September 2023), the decline is an expressive 31.54%, in real terms (the values were deflated by the IPCA of September 2023).
According to Cepea, the reduction in prices paid to producers, which began in May, continues to be explained by the increase in domestic availability of dairy productsdue to the advance in national uptake, the still high imports of dairy products and domestic consumption that is very sensitive to price.
As a result, pressure from distribution channels in negotiations with dairy products has kept the prices of dairy products falling, and this movement has been passed on to the producer.