“The Brazilian Dairy Value Chain”
The dairy production in Brazil has grown 4,5 % per year in the last decade, ranging from 15,6 billion liters in 1993 to 22,6 billion liters in 2003 (table 1). Currently, Brazil is the sixth biggest world dairy producer, being responsible for just about 4,5% of the whole world production. This sector is one of the most important in the Brazilian agribusiness and is the sixth greatest net value agribusiness production. In 2003, the sector generated an income of US$ 3 billion.
Table 1. Dairy Production in Brazil (billion liters).
Source: Brazilian Institute of Geography and Statistics (IBGE)
* Foresee
The dairy production is a livestock activity carried out all over Brazil . The country's climate conditions allow this economic activity to suit itself to the regional environmental diversity. As a consequence, it is noticed the existence of different production systems throughout the country. As for the technological related aspects, it is observed that some producers still adopt old - fashioned techniques. Meanwhile, others have already implemented high-tech methods compared to the most competitive around the world.
Considering the Brazilian regions, the most important recent change was the great increase in the dairy production in those regions which are considered as an agricultural frontiers. In 2002, the highest production growth was noticed in the North of the country (US$ 325 million), overcoming the traditional dairy production regions (Table 2).
Table 2. Dairy Production Growth from 1992 to 2002 ( Brazil – 37,12%).
From 1998 to 2000, the Brazilian dairy productivity was stagnated. During this period, it increased only 0,7%. However, from 2001 to 2003, the productivity has increased 1,5 %, twice as much as before. (Table 3).
The number of dairy cows has grown more than 4% in the last years. This increase is due to the expansion of dairy farms into new areas.
Table 3. Production, productivity and number of dairy cows in Brazil.
| Year |
Total Dairy Production
(million liters) |
Dairy Cows
(thousand heads) |
Productivity
(liters/cow/year) |
1998 |
18.694 |
17.280 |
1.082 |
| 1999 |
19.070 |
17.395 |
1.096 |
| 2000 |
19.767 |
17.885 |
1.105 |
| 2001 |
20.510 |
18.194 |
1.127 |
| 2002 |
21.643 |
19.005 |
1.139 |
| 2003 (1) |
22.595 |
19.195 |
1.177 |
| Average Productivity 1998/2000 |
1.094 |
| Average Productivity 2001/2003 |
1.148 |
| Growth Rate 1998/2000 |
2,16% |
| Growth Rate 2001/2003 |
4,42% |
Source: IBGE
• Foresee: CNA, OCB/CBCL, Leite Brasil and Embrapa Gado de Leite
Concerning the trade balance of the dairy products, the US$ 503,6 deficit registered in 1998 has decreased to 63,8 million in 2003. In this same period, the exports passed from US$ 8,1 million in 1998 to US$ 48,5 million in 2003. During the first eight years of 2004, Brazil has already exported US$ 49,4 million, which represents 86,1% of the total amount exported last year. According to the latest dairy market expectations, exports may hit U$ 70 million this year alone.
The dairy production is carried out by more than one million rural properties. Considering only primary production, it is estimated that it employs about 3,6 million people. In regard to wages and income, for each US$ 1,00 increased in the Dairy Agri-industrial Production System, there will be an increase of US$ 15,00 in the GPD.
Regarding job-post creation, it is estimated that an US$ 1 million surplus in the dairy product demand level might spark off the creation of 585 full-time job posts each year. This figure is higher than other important industrial sectors such as automobile, civil construction and textiles.
| 
