Brazil’s Milk Production Set To Increase

BRAZIL - According to the USDA, production of liquid milk in Brazil will increase by two per cent in 2012, bringing total production to 31.3 billion litres, writes James O’Donnell for Bord Bia.
calendar icon 19 December 2011
clock icon 2 minute read

The Brazilian dairy industry will experience strong domestic demand for liquid milk products resulting from the greater purchasing power of the country’s population. While the domestic dairy economy is on its way up, the USDA also stated it was uncertain about Brazil’s exports as “appreciation of the Brazilian currency and low competitiveness make Brazilian products less competitive in the world market.”

Nonetheless, the performance in the domestic market has allowed Brazil to focus on and improve their home market business rather than entering the more competitive global market. There are also fewer products available for export as a result of such strong domestic demand combined with delays at the start of the production season. This has also led to higher milk prices.

The period between August 2010 and August 2011 saw an increase of 6.3 per cent in milk production from the south of the country. This region is made up of the three states of Parana, Rio Grande do Sul and Santa Catarina.

The average Brazilian consumes 150 litres of dairy each year and overall consumption of fluid milk is set to increase by three per cent in 2012. This increase will be a result of more industrial usage of fluid milk, coupled with higher disposable consumer income. In emerging economies such as Brazil, higher demand for milk is resulting from economic recovery and also demographic growth.

The urban population of Brazil (who consume the most milk) is forecasted to grow by 11 million people between 2010 and 2015 and according to Euromonitor International Brazil’s GDP grew by eight per cent in 2010, up from a decline of 0.2 per cent the previous year. The strong economic prospects and the growth of the urban population are leading the way to future growth.

Forecasts predict that, by the end of 2015, per capita expenditure on milk will be $67 a year. This level of expenditure is above that of developed economies such as France and Germany. The USDA suggests that by 2015, Brazil will no longer be an emerging economy in terms of milk.

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