Price of milk to the producer must decrease 7.4%

Sao Paulo-the price paid to the producer by the liter of milk must retreat 7.4% over the next three months. As projection of the Association of Small dairy Industries of Rio Grande do Sul (Apil), the value can drop to R $1.25 per litre.
The average price paid to producers liter was R $1.35 last month, which represents shrinkage of 1.48% of the gross value practiced by industries in May.
Among the components that must bring down prices is the increased production, favoured by rainy weather and a greater supply of food to animals in the harvest period in the South of the country.
"It is natural that the highest bidder reduce the price," says the President of Apil, Ryan Dall''Bosco. He says, however, that this excess volume is not the primary concern in the industry, not to be higher than expected.
"What concerns us is the lack of demand for the product in the domestic market".
On the evaluation of Dall''Bosco, consumption of dairy products has been affected by the economic crisis. "The increase in the consumption depends on the generation of employment and income, since today, consumption is not enough for this volume of production," he adds.
The Executive also lists as a reason for the decline in prices paid to producers increased imports of milk from Uruguay and Argentina. In the first four months of the year, imports of dairy products increased by 6.7% in value in comparison with the same period last year and went from $ $204,200,000 to $ $218,000,000.
"The average price of the Brazilian product is more expensive than neighbouring countries", Dall''Bosco. For him, the high cost of production and high taxation make the Brazilian product less competitive in the market and makes room for imports. The entry into high quantity of the product (milk powder) coming from these two countries is a recurring complaint in the industry. The Brazil established acquisition quotas for Argentina, with 4500 tons monthly limit. But still negotiates with Uruguay a similar agreement.
On the evaluation of Dall''Bosco, the trend is that this pullback in prices leads to assimilation with the amounts paid by the litre abroad. "The expectation is an adjustment to a value around $ $0.35 per litre", says the Executive.
Brazil Average
According to report released by the Center for studies in applied economics (Cepea), the net price-no shipping or taxes-retreated 0.39% in June in comparison with the month of may, to R $1.26 per litre. The so-called "Brazil average" includes the prices in seven producing States (Goiás, Mato Grosso, Paraná, Rio Grande do Sul, São Paulo and Bahia).
In assessing the Cepea, the result shows a time of transition, with different situations in each market. While in the States of Rio Grande do Sul and Minas Gerais prices have dropped due to increased funding, the off season in São Paulo increased competitiveness among industries and the average price paid for milk in the State. The gross average value registered in the Sao Paulo market in June was R $1.42, high of 1.29% compared with may. In other States the variations were smaller than R $0.1 per litre.
The report points to the beginning of a period of devaluation of the price of milk. The product "spot on" Brazil "low average of 2.1% in the second half of may for the first 15 days of June.
Among the States that do not integrate the average Brazil, Mato Grosso do Sul had 4.38% elevation in the gross price paid to the producer, for R $1.34 per litre. The overall average in those States reached R $1.37, 0.22% indentation in gross value.
The price of the UHT milk negotiated wholesale retreated 3.8 percent in Sao Paulo from May to June. Already the milk collection Index of the Cepea (ICAP-L/Cepea) was discharged of 0.8% between April and may, on "Brazil average".