Cheese makers in Minas adapt production to deal with more expensive milk

A miner’s afternoon coffee table may even lack cornmeal bread, flour biscuits and corn cake, but there will be cheese.

This tradition, however, has been threatened by the high costs of its main ingredient, milk, which rose 24.8% only between June and July this year in supermarkets.

With the alert on, producers in the state, which accounts for approximately 25% of the national volume, are working together to try to avoid price increases for consumers and maintain profit margins.

A kilo of cheese in the capital of Minas Gerais is approximately R$ 45, charged for products with lower added value. The value already scares away consumers and merchants talk about a 30% drop in sales since February.

One way out to deal with the increase in the price of milk is the “double” production, which provides for both the manufacture of more elaborate and simpler cheeses, which have different sales volume and profit margins.

Producers also seek to reduce costs with transport and intermediaries, investing in attracting buyers to the place where they produce and negotiating directly with points of sale in large centers.

“Here we bet on advertising our products to tourists. The inns recommend our cheeses to guests, who do their shopping on the way home”, says the president of Apaqs (Association of Artisanal Producers of Serro Cheese), José Ricardo Ozólio .

The association has 36 producers and manufactures eight tons of cheese per month. Under state law, according to Ozólio, artisanal cheese makers in the state are required to produce the milk they use, which makes them feel more directly the high price of the input.

“The feed has increased 100%. And there’s one more aggravating factor, this time of year, when it’s dry, there’s no pasture, that is, the cattle don’t eat grass, which increases feed costs”, he says.

Ozólio says that to make the turn, that is, to increase cash flow, producers manufacture more expensive cheeses, whose output is lower, but which give a better return, and also less elaborated ones, which sell more at a lower margin.

At Aqmatri (Association of Minas Artisanal Cheese Producers of the Triângulo Mineiro), the decision was to invest in direct negotiation with points of sale, especially emporiums, including in other states, such as São Paulo, Paraná and Santa Catarina.

“We are looking to sell directly to retail, avoiding middlemen”, says the vice president of the association, Walkiria Naves.

Another measure was the search for the best price to hire carriers for deliveries.
The producer points out that it is not just milk in the cheese production chain that has increased. “Salt used to cost R$ 0.80 a kilo. Today it costs R$ 1.30, all this needs to be accounted for”, she says.

The president of Amiqueijo (Minas Gerais Association of Artisanal Cheese Producers), João Carlos Leite, assesses that the producer is between “a rock and a hard place”. “If you increase the price, you lose sales, if you keep the price, you don’t make money”, he says.

The representative is a manufacturer of canasta-type cheese, traditional in the region of the mountains that gave the product its name. “There was an increase in production costs and, at the same time, high inflation eroded the purchasing power of consumers”, he laments.

Like the Serro cheese makers association, producers in the Canastra region are also betting on local sales to avoid transport costs. “With the end of the pandemic, tourists are returning”, he says.

“The way out now is to manage it so that we can walk better in the future”, he analyzes.

Consumers no longer buy whole cheese

At the Central Market of the capital, one of the biggest cheese sales thermometers in the state, traders talk about a 30% drop in sales and a change in the habits of consumers, who continue to buy the product, but now in pieces.

“Consumers don’t buy the whole cheese and, yes, half or a quarter. Without the product, however, they don’t stay”, says Gilda Maria da Silva Vieira, 52, owner of Laticínio Oliveira Guimarães, in the Central Market.

The trader says that Canastra cheese, the market’s flagship, was around R$30 per kilo in February. Today it is at R$45, up 50%.

The manager of Queijaria Mineira, Wellington Henrique dos Anjos Silva, 26, cites the same data of loss of the competitor, and says it is difficult not to pass on prices to the consumer. “You have to keep up. There’s no way around it”, he says.

Fátima Costa, 68, from Laticínios Eldorado, also reports the increase in the fractional cheese trade. “Sales are down, people take half the cheese, but they don’t stop buying,” she says.

Retired Antonio Silva de Souza, 72, adopted the practice of fractional purchases. “A whole canasta cheese used to go for R$50 or R$55. Today it is between R$70 and R$80”, he says.

Souza does not believe that the scenario will improve. “Gasoline hit R$8. Now it’s R$6. Before it was R$3. The same will happen with cheese. It may fall, but it won’t go back to what it was before”, he projects.

But there are also those who manage to maintain the flow of purchases, as is the engineer Carlos Bueno, 69. “I come to the market and buy every 15 days as I always did. You can’t run out of cheese”, he says.