MD_DA130 South America Dairy Market Overview Report 43 - Released on October 22, 2020 In Argentina and Uruguay, farm milk production continues to increase during this spring season and is very close to the peak of the year. So far this year, farm milk intakes are well above 2019 levels, as noted by some contacts. The fat and protein components in milk continue to improve, which is typical during this time of year. Feed supply available for dairy herds is generally ample, while quality is reported as fair/good, although some farming areas are experiencing drought conditions due to La Niņa. Having said this, the volumes of milk available for processing bottled milk, cheese, and yogurt are more than adequate. Meanwhile, exports of dairy products are active within and outside the region. In Brazil, milk production is growing, but at a slow pace. Unlike Argentina and Uruguay, milk output in Brazil is well below the levels of the previous year, a result of the past prolonged drought that impacted the main farm zones of the country. Although the drought has eased in the main dairy areas of the country, many tambos continue struggling with milk yields. The slow recovery on milk production is highly correlated to the low availability and quality of concentrate and forage. Due to the scarcity of milk, processors are paying higher premium prices for raw milk. However, milk intakes remain less than enough to satisfy the strong demands from the food processing industry. Low inventories of UHT milk and cheese continue pushing prices up, making negotiations difficult for some processors and buyers. Imports of cheese and dairy powder remain active from nearby countries. Information for the period October 12 - 23, 2020, issued biweekly Published by: Dairy Market News - Madison, WI ANGEL TERAN-RAMOS, 6084228593 Email: angel.teran@usda.gov Additional Dairy Market News Information: Dairy Market News (DMN) by Phone: (608)422-8602 DMN Website: https://www.ams.usda.gov/market-news/dairy DMN MARS (My Market News): https://mymarketnews.ams.usda.gov