MD_DA130
DA
MD DA130
SOUTH AMERICA DAIRY MARKET OVERVIEW
MADISON, WI. October 12, 2017 (REPORT 41)                                                 

SOUTH AMERICA OVERVIEW:
      
      In terms of farm milk production, during the past year, the 
South American dairy industry has transitioned from a deep crisis, to 
a drastic recovery, mainly due to a climatic improvement throughout 
the Continent.
      
      In the main dairy basins of Argentina and Uruguay, farm milk 
output continues shifting up as the spring flush approaches. 
Milk/cream supply is large, above last year's levels. Heavy milk 
volumes are clearing into bottled milk/UHT, cheese, yogurt, and dry 
milk manufacturing. Shipments to several retail channels and food 
services are strong this week. Overall, inventories for dairy 
products are steady to building.
      In Brazil, farm milk production is robust, more than sufficient 
to cover most domestic processing needs. With large milk/cream 
volumes readily available in the market, processors are paying less 
to producers. This is negatively affecting the revenues of several 
dairy operations (tambos). Some producers blame dairy imports as the 
cause of negative profit margins. Thus, many tambos put pressure on 
the Brazilian government in order to regulate the dairy imports 
coming from Uruguay. In fact, during the current week, the Brazilian 
government suspended the importation of dairy products from Uruguay. 
This measure is in force until Uruguay proves the origin of the milk 
that has been exported to Brazil. Meanwhile, in the Brazilian market, 
the demand for cheese is improving while production is very active. 
In addition, due to the large stocks of UHT milk, some processors are 
curtailing UHT manufacturing.
       


930CT AJ Teran Angel.Teran@ams.usda.gov 608.422.8593
USDA/AMS/Dairy Market News, Madison, Wisconsin Dairy Market News 
website: http://www.ams.usda.gov/market-news/dairy
Dairy Market News database portal: 
http://www.marketnews.usda.gov/mnp/da-home