MD_DA136                                                         
DA                                                               
MD DA136 Skim Milk Powder - South America 
                               
MADISON, WI.  March 16, 2017 (REPORT 11)                         

SOUTH AMERICA                                                    
INFORMATION GATHERED  03/06/2017 - 03/17/2017                    
U.S. DOLLARS PER METRIC TON, FOB PORT                            

SKIM MILK POWDER (SMP): 
In the Southern Cone of South America, skim milk powder (SMP) 
production is very limited as regional milk intakes trend lower. 
At this point, the SMP demand from buyers is well above supply 
on an unbalanced market. Therefore, SMP f.o.b. export prices 
shifted higher, on very light trading. It is important to 
mention that unlike Oceania, E.U., and the United States, South 
America produces low amounts of SMP, therefore prices are 
typically higher than international values. Limited export 
trades from Uruguay/Argentina to Brazil are reflected on the top 
of the pricing range. The bottom price of the range is mirroring 
sluggish SMP exports from the Southern Cone to countries outside 
Mercosur such as Russia and Algeria. The lower SMP prices from 
the U.S. are boosting the interest of some Brazilian buyers. SMP 
export pricing from U.S. to Brazil is competitive, even with the 
28% common external tariff (CET) paid to Mercosur. This tariff 
applies to milk powder imports coming from countries outside 
Mercosur.
According to the Ministry of Industry, Trade, and Services 
(MDIC), Brazil SMP imports from January to February 2017 totaled 
7,268 MT, up 109% from the same period in 2016. From this total, 
imports from Uruguay, Argentina, and United States represented 
44%, 37%, and 19% respectively. 

At the GDT Event 183 on March 7, skim milk powder (SMP) prices 
across all contract periods averaged $2,118 per metric ton, down 
15.5% from the last event.


1.25% BUTTERFAT:                         2,600 - 3,100


1100CT 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