Market trends

Background

Brazilian dairy sector needs more equipment

Ms Tereza Cristina, the Brazilian minister for agriculture wants better technical assistance for farmers, less taxes for imported equipment and a special insurance policy for the dairy sector.

The Brazilian government seems to move forward in supporting the Brazilian dairy farmers. New standards for production have come into force in May and the minister of agriculture wants to develop a plan to promote dairy sector modernisation. Ms Cristina has been appointed as the new agricultural minister in January of this year. In her role as new minister of agriculture and livestock and supply, former Congresswoman Tereza Cristina will focus on conquering new markets, boosting efficiency, increasing production and rising food security while ensuring that Brazilians players are producing increasingly more sustainable.

Ms Tereza Cristina, the Brazilian minister for agriculture want to promote the Brazilian dairy sector. Photo: Daniel Azevedo
Ms Tereza Cristina, the Brazilian minister for agriculture want to promote the Brazilian dairy sector. Photo: Daniel Azevedo

Low milk efficiency

Currently, Brazil has 900,000 dairy farmers. The country has around 20 million cows that together produce around 36 billion litres per year. But the efficiency of production is low. While the US achieves over 10,000 of litres per cow annually, Brazil only gets 2,000. “This is why the government has developed a plan,” says Ms Cristina. The plan aims for better technical assistance for farmers, less taxes for imported equipment, better export possibilities and a special insurance policy for the dairy sector.

Focus on milking equipment

And investments in equipment is needed, considering that only 48% of the Brazilian farmers use mechanical milking. Most of these farmers don’t have the financial capacity to invest in innovative equipment nor have they been trained to operate these systems, according to data from Sebrae (the Brazilian Supporting System for Small and Micro Companies). Due to this, just 22% of the farms is able to produce more than 13 litre per cow per day. At the same time, a lot of small farmers with low production levels of their herd quit their farm. The Brazilian government therefore wants to cut taxes on the import of all kinds of equipment for dairy production, such as milking robots. The agricultural minister also wants to create a task force to transform Brazil into a big exporter for dairy. “Maybe we can cooperate with Argentina and Uruguay to create a block. By combining our forces we can are able to compete with the milk volumes from EU, New Zealand and US.”