Price of milk hit record in July

The milk price received by producers rose in July for the sixth consecutive month and reached record for the month, according to research from the Center for advanced studies in applied economics (Cepea), the Esalq/USP. When considered every month of historical series, however, the average in July is the biggest since October 2016, also in real terms (values were deflated by the IPCA jun/18). The net amount received in July (referring to the capture of June) closed at r $1,4781 per litre on average Brazil "(includes BA, GO, MG, SP, PR, SC and RS and does not contain shipping and tax), an increase of 14% over the previous month. Since the beginning of the year, the accumulated is of high real 44%. In comparison with July 2017, there was rise of 15% in real terms. This month's average is below the October 2016, when it amounted to r $1,4817 per litre. The increase in July was linked to paralysis of the Teamsters, which took place at the end of may, and the industry's attempt to normalize its activities in pós-greve. Desabastecidos, dairy acirraram competition for the purchase of milk in the field in the running in June, aiming to recover stocks. Moreover, the advancement of the off season in the Southeast and Midwest and the "delay" of the winter pastures in the South followed by limiting the capture in June, influencing the formation of the producer price in July. The appreciation of raw material also was reflected in an increase of the prices of milk derivatives in June. However, in July, the bullish movement not sustained. In the first fortnight of July, the price of the UHT (long life milk) fell 1.32 percent and, in the second half of the month (to 27/07), 9.4%, indicating the difficulty in absorbing new highs. For agents of the sector, falling prices reflects a new balance on the market, with the standardisation of inventories and prices returning to levels consistent with the demand – still fragile because of the economic stagnation. According to the Cepea, it is important to be attentive to the milk prices in the spot market. In August, the industry estimates that the offer must follow, based on the limited adverse climate and high grain.