Milk price in Minas Gerais reaches R$3.02, but imports may cap the rally

Raw milk prices in Minas Gerais rose for another month, but the conditions that lifted them are already eroding. Data from the Center for Advanced Studies in Applied Economics (Cepea), reported by Diário do Comércio, show that producers in the state received 4.51% more in the August payment than in the July payment, with volumes traded at an average of R$3.02 per litre.

Slow collection growth meets firm UHT demand

Cepea attributes the increase to collection that is still growing slowly at a time of solid demand for UHT milk. On the Brazilian net average, the litre reached R$2.87 in the August payment, up 4.65% from July and 4.96% above the same month of 2025 in real terms. According to Cepea researcher Ana Paula Negri, supply adjusted to demand allowed prices paid to dairy farmers to climb for one more month.

“Good demand for UHT, stocks considered comfortable and slower growth in collection in some regions kept competition for milk going,” Negri said. The centre’s Milk Collection Index (ICAP-L) rose 2.38% in July on the Brazilian average. Even with that monthly recovery, the index is still down 9.3% in the year, a gap that explains why processors kept bidding for volume through the off-season.

Imports widen domestic availability

The counterweight is arriving from abroad. Figures from Brazil’s Foreign Trade Secretariat (Secex) cited by Diário do Comércio show a clear step up in dairy purchases:

• milk powder bought in July totalled 236.3 million litres in milk equivalent, 9.01% more than in June;
• the same volume was 33.49% higher than in July 2025;
• cheese imports rose 12.7% between June and July.

That additional supply lands in a market where processors are already struggling to price their own output. Cepea surveys indicate that negotiations for mozzarella and milk powder lost pace in July, and part of that slowdown was linked to imports. With derivative prices soft, industry margins are compressed at the exact point of the season when raw milk is most expensive.

Third quarter seen closing lower

Cepea’s assessment is that the next payment may already bring a retraction in milk values, driven by the difficulty industry faces in securing margins on derivatives, by higher imports and by rising output in the field as the end of the off-season approaches. “On the international market, imports widened domestic availability,” Negri said. “In this context, the expectation is that the end of the third quarter will be marked by a retreat in raw milk quotations, influenced by higher supply, imports and the behaviour of derivative prices.”

The Dairy Intelligence Centre of Embrapa Dairy Cattle (CILeite) expects Minas Gerais to lose momentum in the September payment, which refers to milk delivered in August, while still posting a 1.2% rise in the average quotation. That would confirm a deceleration rather than an outright reversal in the state.

Elsewhere in Brazil the signals are already negative. Indications from the Conseleite councils pointed to declines in most states, with Minas Gerais the only one recording an increase. Paraná, Rio Grande do Sul and Santa Catarina all registered falls, pointing to a more bearish trend for the moment. For producers in the southern states, the price cycle appears to have turned first; for Minas Gerais, the question is how long the state’s supply deficit can hold prices above the national average once seasonal production returns.