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USDA - AMS: South America Dairy Market Overview (2019-01-03)

USDA U.S. Department of Agriculture - January 3, 2019


     MD_DA130

     South America Dairy Market Overview

     Report 1 - Released on January 3, 2019

     In Argentina, heavy rain maintained adequate moisture for corn and soybean crops growth.
     However, these wet conditions took a toll on cow milk production. In some cases, the soil of
     some dairy farms remains muddy, which has required greater sanitary measures at the time of
     milking. On the other hand, most dairy operations are operating at normal levels with minor
     hauling issues. Nevertheless, milk/cream intakes remain adequate for most manufacturing
     requests. Meanwhile, on December 17, the government launched its first dairy futures market
     for raw milk to be used as a tool to minimize the economic risk generated by price
     volatility. Futures markets are common in Argentina for grains and beef, but this is the
     first time this type of market has been used for dairy. Milk future contracts are for 5,000
      liters and can be priced in U.S. Dollar or Argentina pesos. The butterfat market is
     steadily firming as demands from ice cream/frozen desserts manufacturers and butter churners
     become seasonally stronger. The interest for other dairy products such as Mozzarella cheese
     is stable.
          Although the climate was mixed during the last two weeks in Brazil, the conditions were
     generally fair for the development of summer crops such as soy and corn. Cumulative 2018
     milk production is below 2017, mainly due to the direct impact of the mid-year trucker
     strike. Nevertheless, at this point, milk output is at the peak of the season and milk
     production is expected to continue to grow throughout 2019. Therefore, milk/cream volumes
     are plentiful to satisfy most processing needs. Large milk volumes are clearing into cheese
     plants, while several balancing plants continue actively churning cream and drying condensed
     milk intakes.

     Information for the period December 24, 2018 -  January 4, 2019, issued biweekly

     Published by:
     Dairy Market News - Madison, WI
     ANGEL TERAN-RAMOS, 6084228593
     Email: angel.teran@ams.usda.gov

     Additional Dairy Market News Information:
     Dairy Market News (DMN) by Phone: (608)422-8602
     DMN Website: http://www.ams.usda.gov/market-news/dairy
     DMN Database Portal: http://www.marketnews.usda.gov/mnp/da-home

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