Brazil dairy sector faces export competitiveness gap
Rising output outpaces domestic demand growth
24 February 2026
1 minute read
By: Brazil’s dairy sector ended 2025 with production outpacing domestic demand, highlighting structural challenges in the industry, according to Embrapa.
Milk production rose 7.2% in 2025, while domestic consumption grew by less than 2% Researchers said the imbalance exposed the sector’s dependence on the domestic market and limited ability to export surplus volumes on a consistent basis.
Glauco Carvalho of Embrapa said reliance on internal demand creates a recurring cycle of expansion followed by price pressure. “If the domestic market does not grow, production cannot grow either, because it generates excess supply and the price worsens. So to get out of this cycle, we need to improve competitiveness, reduce costs and start exporting.”
Samuel Oliveira, also of Embrapa, said measures to curb production or restrict imports may provide short-term relief for producers but could raise prices for consumers. At the same time, he said some regions are demonstrating improved competitiveness. “There are today conditions for the country to be competitive. There are regions and production systems that are showing this. For example, in the Castro region, in Paraná, the production is almost 3 million liters of milk per day and the productivity of farms is equal to or higher than that observed in Argentina, for example.”
Milk production in Brazil remains highly diverse, with an estimated 513,000 producers across the country, according to the Milk Intelligence Center. Embrapa researchers said reducing technological and management gaps among producers will be key to strengthening Brazil’s position in export markets.
