Understand: Brazil imports powdered milk, but is one of the giants in dairy products

The federal government's decision to suspend the application of anti-dumping measures against products coming from Argentina and Uruguay, last Thursday (27/5), shed light on a discussion that has been present in the sector for more than 30 years: the import of powdered milk.

This is because Brazil produces an average of 35 billion liters of milk per year. Among the members of Mercosur, it leads, by far, in the production of dairy products, but lives with dissatisfaction in the dairy chain due to continuous imports of powdered milk from Argentina and Uruguay.

Purchases of industrialized products have been taking place since the 1990s, according to MAPA (Ministry of Agriculture and Livestock) and, historically, have been consolidated due to more competitive prices in neighboring nations.

The appetite of Brazilian industries, which use the product to manufacture cheaper yogurts, dairy drinks and cream cheese, has also kept imports high in recent years.

In this context, the suspension of anti-dumping tariffs displeased Brazilian producers and sectoral entities, such as the Brazilian Association of Girolando Breeders, the CNA (National Confederation of Agriculture) and the FPA (Frente Parlamentar da Agropecuária), which complain about the impacts of external purchases on prices paid in the domestic market.

The government fears negative impacts on the economy. In practice, the impasse puts rural producers and part of the industry on opposite sides.

While livestock farmers defend protection mechanisms to guarantee income and competitiveness, companies argue that imports help to balance supply, reduce production costs and avoid increases for the consumer.

After all, why does Brazil import milk if it produces enough volume for the domestic market?

The answer involves economic, logistical and commercial factors.

Although it is among the largest global milk producers, Brazil is not always able to meet all the industry's demand at competitive prices, as the report found.

At certain times, powdered milk produced in Argentina and Uruguay reaches the Brazilian market at lower prices than those practiced domestically due to subsidies, such as tax exemptions.

The three countries are part of Mercosur, a bloc that allows free trade without charging import tariffs.

Geographical proximity reduces transport costs, while production conditions in neighboring countries often ensure greater competitiveness.

Given the scenario, the arrival of an increasing volume of powdered milk in Brazil has caused some producers to give up or reduce investments in the activity, according to Alexandre Lacerda, president of Girolando.

According to data from Secex, between 2023 and 2025 Brazilian imports grew 66%, to 2.2 billion liters of milk purchased in 2025. In the first months of 2026 alone, imports of powdered milk have already exceeded 320 million liters.

This increase contributed to the worsening of the situation due to the increase in the costs of operating the dairy chain: animal feed and inputs became more expensive, the effects of the war in the Middle East and the prices paid to milk producers, which even rose, but not enough.

According to Cepea, the price paid to milk producers closed April at R$2.66 per liter, the fourth consecutive increase in relation to the month of January, when the price was R$2.01 per liter.

However, this increase is due to lower supply and strong competition among dairy products, according to the entity.

Stock for industry

Milk powder also functions as a type of "strategic stock" for the industry.

The product has a longer shelf life and can be used in the manufacture of various derivatives, such as dairy drinks, yogurts, processed cheeses and reconstitution of fluid milk.

On the side of Brazilian producers, however, the assessment is different. Entities in the sector argue that the increase in imports puts pressure on the prices paid to livestock farmers precisely at times of greater domestic supply.

According to representatives of the dairy chain, this reduces the profitability of the activity and makes it difficult to recover investments made in the properties.

Alexandre Lacerda highlighted to the reporter that the challenges are worsening dairy farming in Brazil and demotivating producers. Importing powdered milk is one of the worst pressures, according to him.

"The milk sector has been suffering and asking for solutions for a long time. Tariffs on milk from both Argentina and Uruguay are necessary to preserve the domestic market, which is facing credit difficulties, high interest rates and, more recently, the approval of the 6X1 journey, which increases the sector's operating cost", he stated.

The CNA (National Confederation of Agriculture) will continue to work with the government to demonstrate that the adoption of anti-dumping measures will not negatively affect the country's economy, in addition to contributing to the survival of almost 1 million Brazilian producers who, according to the entity, face unfair competition.

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Source: CNN