Milk market in MERCOSUR

Earlier Report Observations

From 2018 to 2020, the milk market volume in MERCOSUR grew from 48.3 million tons to 50.5 million tons. This expansion was supported by investments in technology to improve production efficiency in Argentina and Brazil, which increased national output. The COVID-19 pandemic in 2020 disrupted supply chains and raised operational costs, yet market volume continued to rise, and the market value jumped to $176.3 billion due to higher costs and adjusted demand.

In 2021 and 2022, the market faced mounting production costs from global input inflation, while the exit of small and medium producers in Brazil further consolidated the sector. The Russia-Ukraine conflict in 2022 exacerbated cost pressures and reduced export availability, leading to a slight dip in market volume to 50.1 million tons. However, rising costs pushed the market value to a peak of $196.7 billion. High milk prices in Brazil during the off-season also temporarily dampened consumption.

By 2023, market volume recovered to 50.6 million tons as milk production in Brazil increased, supported by higher imports. Persistent climatic challenges like El Niño and economic uncertainties, including reduced demand from China, continued to shape the industry. The market value adjusted to $193.5 billion, reflecting ongoing cost dynamics and trade adjustments.

Production milk in MERCOSUR

In kind, 2017-2020, K t

Top producers of milk, 2017-2020

World map of production of milk, 2017-2020

Milk production in MERCOSUR has increased for the third consecutive year. In 2020, the region produced 50 666 thousand tonnes of milk, marking a 2.6% rise compared to the previous year. Over the period from 2017 to 2020, production grew by 7.1%, with an average annual growth rate of 2.3%.

Annual dynamics of production in MERCOSUR in kind, 2017-2020, K t

In value, 2017-2020, B $ US

Following a two-year decline, milk production in MERCOSUR rebounded. In 2020, the output was valued at 176.9 billion US dollars, up by 23.1% from 2019. From 2017 to 2020, production increased by 15.8%, with an average annual growth rate of 5.0%. The lowest value was recorded in 2019 at 143.7 billion US dollars, while the largest decline occurred in 2018 at 5.8%.

Annual dynamics of production in MERCOSUR in value, 2017-2020, B $ US

Exports milk from MERCOSUR

Exports in kind, K t

In 2020, milk exports from MERCOSUR totalled 294.1 thousand tonnes, showing minimal change compared to 2019. Over the period from 2017 to 2020, exports rose by 25.8%, with an average annual growth rate of 7.9%. The peak was in 2018 at 309.7 thousand tonnes, with the largest decline in 2019 at 5.4% and the largest increase in 2018 at 32.4%.

Annual dynamics of product's exports from MERCOSUR in kind, 2017-2020, K t

From 2017 to 2020, Algeria, China, and Russia were the largest buyers of milk from MERCOSUR, accounting for 36.8%, 4.7%, and 4.7% of exports in kind, respectively. Together, they contributed 46.2% of total exports in kind, indicating a diversified country structure.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from MERCOSUR in kind, 2017-2020

Exports in value, M $ US

In 2020, MERCOSUR's milk exports reached 1 027 million US dollars, a 20.4% increase from 2019. Over the period from 2017 to 2020, exports grew by 36%, with an average annual growth rate of 10.8%. The largest decline was in 2019 at 7.1%, while the largest increase occurred in 2018 at 21.7%.

Annual dynamics of product's exports from MERCOSUR in value, 2017-2020, M $ US

Between 2017 and 2020, Algeria, Russia, and China were the largest but not dominant buyers of milk from MERCOSUR in value terms, with shares of 38.9%, 4.8%, and 4.5%, respectively. Together, they accounted for 48.1% of total exports in value, reflecting a broad base of smaller partners.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from MERCOSUR in value, 2017-2020

Imports milk to MERCOSUR

Imports in kind, K t

After a two-year decrease, milk imports into MERCOSUR increased. In 2020, the region imported 85.2 thousand tonnes of milk, a dramatic gain of 29.5% compared to the prior year. From 2017 to 2020, imports decreased by 6.7%, equating to an average annual decline of 2.3%. The lowest value was in 2019 at 85.2 thousand tonnes, with the largest decline in 2018 at 16.6%.

Annual dynamics of product's imports to MERCOSUR in kind, 2017-2020, K t

From 2017 to 2020, Chile and the United States were the two main sources of milk imports to MERCOSUR, together accounting for 4.2% of total imports in kind.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to MERCOSUR in kind, 2017-2020

Imports in value, M $ US

Following a two-year decline, milk imports into MERCOSUR rose. In 2020, the region imported approximately 360 million US dollars of milk, reflecting a sharp gain of 35.0% from the prior year. The lowest value was recorded in 2019 at 266 million US dollars, with the largest decline in 2018 at 18.2%.

Annual dynamics of product's imports to MERCOSUR in value, 2017-2020, M $ US

Over the period from 2017 to 2020, Chile and the United States together accounted for 3.9% of total imports in value terms, making them the main markets for milk to MERCOSUR.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to MERCOSUR in value, 2017-2020