MD_DA130 South America Dairy Market Overview Report 49 - Released on December 6, 2018 In general, cows¶ milk production is seasonally steady to lower in the Southern Cone region due to higher temperatures. However, in some regions and countries outside the Southern Cone, such as North/Central Brazil, Perú, Ecuador, and Colombia, farm milk outputs continue growing. In Argentina, the good quality of pasture, a relatively steady to lower U.S. dollar value trend, and an improvement on farm gate prices are helping to maintain farm milk production at high levels. However, any uptick movement in the U.S. could change this positive scenario as the value of the Argentina peso remains in a bearish position. In addition, inflation is noticeable high in this country. Meanwhile, a few small farmers, without capacity for economies of scale, continue to go out of business by selling their livestock to the beef industry. However, several large farms remain in force in the industry with a fair capital position. In Uruguay, milk production has declined as warmer summer temperatures gradually increase heat stress in dairy herds. Nevertheless, milk/cream intakes are enough for most processing needs. Recently, one of the main processors of dairy products closed, becoming the third plant to permanently shut down operations during the last three years. At this point, the bulk of milk/cream volumes are clearing into cheese, butter, yogurt, and dairy powder processing. Bottled milk production is down as most schools will be closed during the summer break. Farm milk output remains heavy in Brazil at this country is at or close to its seasonal flush. Bottled milk requests from retailers/food service are robust. Moderate to large milk volumes continue clearing into milk powder processing plants. Information for the period November 26 - December 7, 2018, 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