Pros and cons of the wet weather in South America [News South America n°1/2018]

Period: December 11, 2017 – January 5, 2018

During the past two weeks, wet weather negatively affected milk production in Argentina. On the other hand, these rains produced a considerable relief of dryness in the main corn and soybean areas of the country.

The Uruguayan government is creating a special fund in order to allow dairy farmers to pay their debts over a longer time frame, since this is still a major concern for the whole country’s dairy industry. Meanwhile, mild temperatures continue supporting milk production growth.

Milk/cream supply is steadily declining in Argentina, but is sufficient to meet the main dairy industry processing needs. The cream market is steadily firming as demands from ice cream/frozen desserts manufacturers and butter churners become seasonally stronger (summer). The interest for other dairy products such as Mozzarella cheese is stable.

Milk production in Brazil is at the peak of the season. Rain showers improved soybeans and cotton conditions in the main dairy states, and did not affect farm milk output. Milk volumes are abundant to satisfy most manufacturing needs. Thus, the spot milk market is very weak. Large milk volumes are clearing into cheese processing plants.

SMP export prices decreased in the Southern Cone region, while the price range has narrowed. The domestic demand is fair to good. With higher condensed skim volumes throughout the region, SMP production is active and stocks are slowly growing.

WMP export prices increased slightly. WMP production is ongoing in most balancing plants, thanks to condensed milk availability, and inventories are steady to slightly higher.

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CLAL.it – Milk deliveries in Argentina