Just 5% of dairy farms account for over 60% of Brazil’s milk production

Brazil’s dairy industry is undergoing structural changes, with an increasing share of production concentrated in large-scale farms. According to FAS USDA, just 5% of the country’s dairy farms, supplying more than 1,000 liters of milk per day, account for 61.5% of total production. Meanwhile, around 60% of farms produce no more than 200 liters daily, collectively contributing just 11.9% of national output. This gap highlights the significant competitive advantage of large, technologically advanced operations over smaller producers.

The concentration of production is accompanied by a gradual decline in the dairy cow herd. According to USDA forecasts, Brazil’s milking herd is expected to decrease to 15.9 mln head in 2027, compared with 16.2 mln in 2026 and 17 mln in 2025. Despite this decline, total milk production is projected to continue growing thanks to improved productivity per animal. Brazil is expected to produce 26.7 mln tons of milk in 2027, nearly 2% above the forecast 26.2 mln tons in 2026.

The main drivers of productivity growth include improvements in dairy cattle genetics, better feeding practices, automation of production processes and farm modernization. Large farms are investing more actively in modern equipment, herd management systems and confinement housing technologies. Meanwhile, smaller producers are increasingly facing high costs and difficulties maintaining competitiveness, accelerating their exit from the dairy business.

Higher milk production is expected to support further expansion of the dairy processing industry. According to USDA forecasts, Brazil’s cheese production will increase by 2.4% to 840 thsd tons in 2027, while butter output is projected at 90 thsd tons, skimmed milk powder production at 170 thsd tons and whole milk powder output at around 610 thsd tons. Thus, improved dairy herd productivity will allow the country to increase dairy product output despite a declining number of cows.

At the same time, Brazil will remain an important importer of dairy products. In 2027, whole milk powder imports could rise to 160 thsd tons from 155 thsd tons a year earlier, while cheese imports are forecast to increase to 62 thsd tons from 60 thsd tons. Argentina and Uruguay remain the main foreign suppliers. Despite rising domestic production, high milk production and collection costs, along with regional differences in farm efficiency, are expected to sustain demand for imported dairy products.

Tags: Brazil, Milk, Dairy