Brazil Milk Output Hits Record as Farm Prices Fall

Brazil’s milk production reached a record high in 2025, rising an estimated 7.2 % year-on-year as dairy herds expanded and output efficiency improved — even as farmgate milk prices declined, squeezing producer margins and raising concerns about profitability in the sector.

The Brazilian Agricultural Research Corporation (Embrapa) reported that total annual milk output in 2025 exceeded the previous high, reflecting continued growth in major producing states such as Minas Gerais and Paraná, where favourable weather and feed availability supported increased yields.

However, the record output has come amid falling domestic milk prices, driven by abundant supply and weaker buyer demand, which have put downward pressure on farmgate returns. Analysts warn that prolonged low prices can erode profitability, particularly for smaller producers who lack the scale to absorb cost fluctuations.

With production outpacing domestic absorption, Brazil’s dairy sector also faces structural challenges in expanding export competitiveness and avoiding excess inventory accumulation. Despite high overall volumes, the export share for dairy commodities such as powdered milk and cheese remains constrained compared to major exporters in Europe and Oceania.

Industry insiders suggest that balancing production growth with stable pricing and enhanced processing capacity will be key to sustaining the dairy sector’s trajectory, especially as Brazil continues to play a central role in Latin America’s dairy market — where it accounts for a significant share of regional milk supply and consumption.

Source : Dairynews7x7 Feb 25th 2026 Read full story here

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