Price of milk to the producer in Brazil is the highest

In times of high dairy prices in the world, Brazil has become the country with the highest dollar amount paid to producers of milk. At first glance, this could be a cause for celebration by the Brazilian producers. However, the highest price in the country is the result, largely, of inefficiency in the field, high logistics costs and valued exchange rate.
It stands to reason that international prices on the rise, as a result of a drought in New Zealand-the world's largest exporter of dairy products, also exert influence. The higher price has another downside: means less competitiveness of Brazilian milk in the international market, which makes the scale of the national shortage of milk.
Price compilation drawn up by Milkpoint, consulting firm specializing in dairy products, shows that, in March, the Brazilian producer received $ 0,4621 by kilo of milk, more than all other major producers, such as New Zealand, Argentina, Uruguay, United States and Europe (see charts). Data from Brazil are the Cepea and others were raised by Italian consultancy CLAL, specialised in dairy market.
One of the main factors that Brazilian milk become more expensive when compared to other producer countries is the low productivity of lactating animals. In Brazil, the yield is just about 4 liters of milk per animal/day, compared with about 30 liters per day in the u.s., 22 litres in Europe, 18 liters in Argentina and 15 liters in New Zealand.
The President of Brazil, Jorge Rubez Milk points out the lack of specialization of the flock as a cause of the low average income of the activity in the country. "About 70% of the herd is not specialized. Is a mixture of Armadillo with cobra, "quips the leader. He claims that, in milk farms where the herd is specialized, the productivity of animals is similar to that obtained in the United States, for example. Understand by "specialized herd" for the Dutch breeds cattle dairy production, girolanda, jersey and pardo-Switzerland.
To calculate the average productivity, the IBGE divides the milk production by the number of lactating animals. The latest data available, from 2011, show a milk production of 32.09 billion liters to 23.23 million cows in lactation. Among those millions of lactating animals, many are cutting breeds cows, originally not intended for the production of milk, so with low productivity.
The President of Brazil, entity that gathers Milk producers, defends contributions in genetics and technology to change this picture of low yield in dairy farming in the country. The lack of expertise of the herd also occurs because often the dairy farming is not the main activity and is not done in a professional way, adds Laércio Barbosa, Director of Dairy Jussara.
In the evaluation of Marcelo Pereira de Carvalho, an analyst at Milkpoint, the small dairy farmer model, which predominates in Brazil, "is not sustainable". As well as Rubez, he defends investment in technology and in the management of the properties with views to professionalization and the cluster model for milk production. "Why are not competitive on the milk if we are in other areas and we have availability of grass, grain and water?" asks.
Another Brazilian fragility in relation to other producing countries are the higher logistics costs, since dairy may be far from farms supplying milk. "Brazil is the cost. The shipping is expensive, the food [animals] is dollarized "says Barbosa.
The ups and downs do not stop there. In Brazil, the management cost is higher because of the workmanship. In addition to increased mechanisation, in New Zealand and in Europe, for example, is basically the family who works in the milk-producing property, reminds the entrepreneur.
"We have a problem of the productive base," says Marcelo de Carvalho, Milkpoint. He claims that the cost of milk production in Brazil rose more than in other producers due to increased wages, loss of jobs in the countryside and high land prices because of the dispute with the cane and the beans.
Oak notes that the assessment of the competitiveness of production cannot take into account only the volume of milk produced daily by the animals. The New Zealand, with total production of 19.7 billion liters last year, has yield per animal less than United States and Argentina, but the milk which produces has fat and higher protein-is "a richer milk," he says. Compared with Brazil, that productivity per animal has less, the New Zealand advantage is even greater.
The analyst adds that not always the highest productivity per cow means lower costs or greater profitability. "It depends on the production system. The most obvious example is the New Zealand, that even with production per cow less, has lower cost than the US and has almost 40% of the export market, "says Carvalho. What allows the lower costs is the production system of the country of Oceania, where the animals are raised on pasture, with high quality fodder. Already in the USA, which produced 90 billion litres of milk in 2012, the animals are confined and receive high food supplementation.
Not enough inefficiency in the field last year, dairy farmers have suffered with high grain costs, used in feeding the dairy herd. Higher costs hampered the expansion of production, says Rafael Ribeiro, Scot consulting. Estimates indicate that total milk production in the country was between 32.42 billion and 32.5 billion in 2012, growth of just 1% on 2011.
And, in the face of low competitiveness against competitors in the international market, Brazil continues to expand Dairy imports, leaving behind the pretense of becoming an exporter, that scenario seemed almost reality a few years ago. In 2012, the dairy imports rose 3.6% to $ 638 million, according to the Ministry of agriculture. The thread's deficit has also grown: nearly 5% to $ 518,6 million.