With a milk price of approximately €0,35, dairy farmers in Brazil can do well. Farmers mainly depend on the domestic economy, which is currently developing relatively well. The discussions about climate change and CO2storage hardly play a role in the South American country.
Brazil is almost as big as Europe, which makes it impossible to describe the Brazilian dairy sector as a whole. The differences in climate and product sales between the various regions are far too great for that. Government economic statistics show that total milk production in 1 was 2018 billion liters, but this is only the amount of milk covered by hygiene standards. The figures on the total milk production in the country show that the production in 27,7 was almost 2018 billion liters.
Much of the milk is produced by small farmers, who have only a few cows. The 8 billion liters that do not meet hygiene standards are seen as 'informal milk' and are sold directly on the street in small towns. This also explains the very low average milk production. According to government statistics, this is only 1.830 kilos of milk per cow per year.
However, Brazil also has areas where Holsteins are kept professionally and on a large scale. The cows of that breed usually produce an average of 30 liters or more per day. However, the largest group of farmers (approximately 50%) work with cows of the Girolando breed. That is a cross between the Holstein-Friesian and Indian Gyr. This hybrid appears to be very resistant to the Brazilian climate.
Fragmented dairy landscape
The diversity in the sector is also reflected in the variety of dairies. Brazil has 6.000 processors, although about 4.000 of them are relatively small and only operate locally. The other 2.000 processors are accredited to market their products nationwide. Nestlé is the largest processor in the country, with more than 1,7 billion kilos of milk (annual basis). Bela Vista and Unium follow with an annual processing of 1,3 billion and 1,2 billion kilos of milk per year.
Unium is a collaboration between 3 cooperatives (Castrolanda, Frisia and Capal) in the southern state of Paraná. It is the area where the dairy farmers have Dutch roots and often speak good or some Dutch. They farm in a more or less comparable way as in our country. Armando Rabbers is one of those dairy farmers. In 2012, he was the first dairy farmer in Brazil to start working with milking robots.
Rabbers orientated himself on milking robots in 2011, because the dairy sector was economically in the wind at the time. He renovated the dairy barn and installed 2 milking robots for a total of approximately €700.000. The robots and barn cost him less than €500 per cow place. He expects to have earned back the investment in 8 to 10 years. Rabbers' 140 cows now produce an average of more than 40 liters per day. The total daily production is just under 5.800 liters, which comes down to almost 3.000 liters per milking robot. Rabbers receives a milk price of approximately €0,36 converted and his cost price is €0,31.
Milk not always antibiotic-free
The diversity in the Brazilian dairy sector and the size of the companies also means that the quality standards are different than in Western Europe. Thomas Domhoff is the CEO of Castrolanda (part of Unium) and does not mince words when it comes to the subject of 'antibiotics': "I cannot guarantee that all our milk (and therefore our dairy products) is always 100% antibiotics-free That is the case for 99%, but sometimes something can sneak in between."
"Due to the many small-scale companies, control at farm level is neither feasible for us nor affordable," said the director. Partly due to the warm weather and high humidity in the country, the quality of the milk is already a problem. The 100 best dairy farms recorded an average bacterial count of 17 and somatic cell count of 284 last year.
Rising land prices
Besides the economy and the level of the milk price, it is the rising land prices and the infrastructure that strongly influence the sector. In the area around Paraná, land prices rise from €12.000 to no less than €30.000. These high prices are mainly caused by the fertile soil and climate that allow 2 harvests per year in this region.
The infrastructure in the country is also a major stumbling block, because there are not enough good rails to efficiently transport all soybeans and corn from the interior. The main roads in the wealthier states are reasonably good, but many roads in the Brazilian countryside are in poor condition. This makes transport of feed and milk expensive and sometimes difficult. It is known that many soy traders charge a loss of more than 10% in transport. This is because the bouncing of the trucks spills soybeans and regular accidents occur.
Climate and manure law do not play a role
Brazilian dairy farmers today are mainly concerned with the domestic economy, infrastructure and the ability to continue to grow good feed in the difficult climate. Topics like CO2reduction, climate change and the manure law do not concern the farmers, because these subjects play little or no role in the country.
Only the use of phosphate has been checked in recent years via measurements in the soil and groundwater. This is to possibly limit the use. Just the thought that these checks will increase in the coming years makes Brazilian dairy farmers shake their heads.
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