Brazil dairy farmgate prices rise for third month but momentum slows
Tight milk supply drives processor competition in Brazil
15 May 2026
1 minute read
By: Brazilian dairy farmers received an average price of BRL 2.3924 (USD 0.48) per litre in March on the Brazil Average measure, according to Cepea, up 10.5% in real terms compared to February. While the upward trend extended into a third consecutive month, the pace of gains slowed as competition among processors for raw milk began to ease.
Supply remains the central pressure point. The Cepea Milk Production Index (ICAP-L) fell 3.9% in March on the Brazil Average, bringing the cumulative first-quarter decline to 11.1%, driven by seasonal factors and reduced investment in the sector. Processors competing for shrinking volumes pushed farmgate prices higher, though that dynamic may be softening.
On the cost side, the Effective Operating Cost rose 0.46% in March and 2.11% over the quarter. Dairy byproduct prices also moved up, with UHT milk gaining 18.3% and mozzarella rising 6.1%, based on a Cepea survey conducted with support from OCB, the Organisation of Brazilian Cooperatives.
Imports climbed 33% in March to 604 million litres of milk equivalent. Looking ahead, Cepea expects the upward price trend to lose momentum from May onward, as consumer resistance to elevated retail prices builds and domestic production is forecast to recover between May and June.
