Farmers warn beloved breakfast staple may soon be unaffordable

Milk may do a body good, but Brazil's rising prices for the drink are not as great for your pocketbook. February marked two consecutive months for higher prices at the grocery store and a substantial increase in year-over-year costs, according to a report from the country's Center for Advanced Studies on Applied Economics.

What's happening?

The price hikes come down to market basics: supply and demand. High temperatures combined with a recent lack of rain have created the perfect storm for decreased production of raw milk, the center, also known as Cepea, reported. Milk processors are having to battle one another to gain a share of less product. Add increased demand for milk products, and Brazilian shoppers are seeing higher prices.

Brazil's six different climates generally see lower production in the beginning of the year; however, unexpected weather patterns have dropped output even further. And out-of-character weather events in other seasons have put natural production cycles out of sync. According to the report, the Cepea Milk Production Index dipped by 4.6% from January to February.

Why are higher prices concerning?

Brazil consumes the most milk of all countries surveyed — more than 27 million metric tons — according to data collected by Statista.com. It is also a big producer of ultra-pasteurized heated milk, popular because that process means no refrigeration is necessary. Current refrigerators contribute to global warming, so any product that reduces the need for it helps people and the environment.

Cattle feed in Brazil is much cheaper than the premium varieties in the West. However, as the Earth's annual temperatures continue to rise, the components of the feed require more water to grow. Increased water usage depletes that resource for other uses, and a reduction in feed production contributes to lower output on dairy farms.

All of this equals higher totals at grocery stores, and it's instructive as to how similar circumstances could affect prices in other countries. Buyers will have to become even more resourceful in the checkout lane at a time when prices are up for many food items.

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What's being done about higher prices?

As with almost all products, the ups and downs of supply and demand make it difficult to predict how prices will change for Brazilian milk. Analysts see dairy farmers' current windfall, with static production costs and higher profits, as the perfect time for those farmers to invest in the future.

Sound budgeting and research into purchasing better equipment and learning any possible new techniques could pay off down the line in the form of increases in output.

Greater native output means Brazil won't have to rely as much on imports, creating a ripple effect around the globe. Stabilizing the milk market will lead to more consistent pricing, which consumers can use to make the best use of their money. Reducing concerns about prices on any grocery items is a boon no matter where you live.

How much does your family spend on groceries each week?

Under $75 💲