The Brazilian dairy sector is undergoing a transformation. Amid fluctuations in prices paid to producers, increased imports, and changes in the regulatory environment, the industry has accelerated discussions about professionalization, predictability, and market transparency.
The movement is taking place in a sector of great economic and social importance. According to data from Ministry of Agriculture and Livestock (MPLSA)Brazil is the world’s third largest milk producer, with production exceeding 34 billion liters per year. Milk production is present in 98% of Brazilian municipalities, involves more than 1 million rural properties, and generates approximately 4 million jobs.
Despite its importance, the supply chain still experiences significant volatility. Data from Brazilian Institute of Geography and Statistics (IBGE) Data shows that Brazilian dairy companies collected 27.51 billion liters of milk in 2025, an increase of 8.5% compared to 2024 and a new record for the country. Minas Gerais remained the main national producer, followed by Paraná and Rio Grande do Sul.
Despite the growth in production, Prices paid to producers weakened throughout the year. The average price per liter was R$ 2.56 in 2025, a decrease of 1.9% compared to the previous year. In the fourth quarter, the decline was even more pronounced, at 19.9%.
From state intervention to the free market.
The Brazilian milk market underwent a structural change in the early 1990s. Until then, prices were set by the federal government as a mechanism to control inflation.
However, the model created distortions. Because official price adjustments were slow to keep pace with production costs, producers and industries often operated without a profit margin, leading to quality loss, shortages, and insecurity in the sector.
With deregulation, prices began to follow the dynamics of supply and demand, as well as factors such as weather, production costs, and the international market.
To Roberto Hugo Jank Junior, vice president of Brazilian Association of Milk Producers (Abraleite)The main challenge today is not necessarily the price, but the lack of predictability. “Part of the sector doesn’t have visibility into the price it will receive that month, so it only finds out the price on the last day of the month or the first day of the following month,” he says.
According to Jank, the supply chain has been gradually becoming more professional, especially through contracts and market benchmarks. “The system of contracts between producers and industry is improving and expanding. Many industries are already using market price benchmarks to make contracts with producers.”
The end of antidumping measures has broadened the debate on competitiveness.
Discussions about measures to support the market gained momentum after 2019, when the Brazilian government ended anti-dumping tariffs on powdered milk imported from the European Union and New Zealand.
Since then, industry entities have been pushing for mechanisms to increase the competitiveness of domestic milk and reduce market distortions.
It was in this context that state laws began to emerge aimed at restricting the reconstitution of imported powdered milk for sale as fluid milk.
Paraná was a pioneer in regulating, in 2025, a law that prohibited the practice in the state. The measure ended up serving as a basis for similar legislation in Goiás and Santa Catarina.
Bill 5738/2025 brings discussion to Congress.
The advancement of state laws opened up space for the processing of Bill 5738/2025, authored by Federal deputy Zé Silva (União Brasil-MG), approved in April of this year by Agriculture Committee of the Chamber of DeputiesThe text prohibits the reconstitution of imported powdered milk for use in food products intended for human consumption throughout the national territory.
According to the legislator, the proposal seeks to reduce distortions in the supply chain and increase the traceability of raw materials used by the industry.
“The main imbalance in the chain is that the consumer continues to pay the same price as before, while the producer receives a much lower price.”
Zé Silva also states that the measure should not be seen as protectionism. “Dairy farmers don’t need protection, they need to be respected.”
Roberto Jank believes that the main merit of the proposal lies in combating fraud and increasing transparency. “You can’t deceive the consumer who thinks they are drinking milk when they are actually drinking a reconstituted product without any information.”
DATAGRO Milk Indicator Increases Transparency
Alongside the regulatory discussions, the sector also began to gain new market intelligence tools.
In April of this year, the DATAGRO launched DATAGRO Milk Indicator, an initiative created to increase transparency regarding prices in the Brazilian market.
The tool publishes two monthly bulletins: one focused on price. paid to the producer and another to contract price, both expressed in reais per liter. The methodology includes important producing states, such as Minas Gerais, Goiás, Paraná, Santa Catarina, Rio Grande do Sul, and São Paulo.
The goal is to create a common reference point for producers, industry, and market players, in a scenario that is increasingly dependent on rapid information and predictability.
Professionalization will be crucial for the future.
Although discussions about imports have gained prominence in recent years, industry representatives believe that the main challenge for the Brazilian dairy supply chain remains structural.
According to Roberto Jank, the advancement of the activity will depend on the expansion of contracts, economies of scale, standardization, and greater productive efficiency. “The milk market in Brazil needs to become more professional,” says the authority.
Zé Silva argues that public policies focused on rural credit, consumer income, and strengthening national production will continue to be fundamental to ensuring the sector’s sustainability.
Between new legislation, market indicators, and increased demands for transparency, the Brazilian dairy supply chain is entering a new phase—one that is more technical, professional, and information-driven.
This text was translated by machine from Brazilian Portuguese.