Argentina’s Dairy Consumption Declines Sharply, Poised to Hit Historic Low by Year-End
Source: DairyNews.today
The Argentine dairy sector is facing significant challenges as a recent report from the Argentine Institute for Agricultural and Industrial Development (IDAA) reveals a steep decline in dairy consumption during the first half of 2024.
The report indicates that dairy consumption fell by 17.3% in tons and 14.4% in liters compared to the same period in 2023. If this downward trend persists, 2024 could close with the lowest level of dairy consumption ever recorded in the country.
The report underscores the severity of this decline, predicting that "2024 will almost certainly close with the lowest consumption level in our history."
Historically, Argentina's dairy consumption has fluctuated significantly. In 1990, the country recorded an annual per capita consumption of 162 liters, which peaked at 227 liters per capita per year in 2000. Following the economic crisis, consumption fell to 179 liters per capita in 2003, but rebounded to 217 liters by 2015. However, by the end of 2019, consumption had dropped again to 182 liters per capita, before slightly recovering to 194 liters per capita in 2023.
A breakdown of the dairy market reveals that fluid milk experienced a 23% year-on-year decline in June 2024, accumulating a 16.2% drop in the first half of the year. Specifically, non-refrigerated fluid milk consumption fell by 18.5%, while refrigerated milk saw a 12.2% decline. Powdered milk was hit hardest, with a 33% year-on-year drop in June and a 30% decline over the first six months of the year.
The report highlights that while all categories of dairy products experienced declines, long-life milk and powdered milk suffered the most significant drops. Consumers have increasingly opted for more affordable dairy options, further deepening the decrease in consumption, even for lower-priced products.
Cheese, which constitutes 60% of dairy consumption in Argentina, also faced a significant downturn. There was an 18% year-on-year decline in June, with an 11% drop recorded in the first half of 2024.
Other dairy products also saw notable consumption declines during the first half of the year:
Desserts and flans: -53.4%
Yogurt and fermented milk: -21.2%
Butter: -16%
Cream: -12%
Dulce de leche: -13.7%
Milk production itself has been adversely affected, registering a 12.6% year-on-year decline in the first half of the year. This reduction marks the lowest production level in absolute terms in the past 17 years and, on a per capita basis, is the lowest in Argentina's history.
Despite the challenges in the domestic market, Argentina’s dairy exports showed some resilience. June saw a 6% year-on-year increase in export volumes, with nearly an 8% rise in equivalent liters. However, in terms of revenue, this translated to only a marginal 0.1% increase. For the first half of the year, export volumes grew by 6.7% in tons and 13% in equivalent liters compared to the same period in 2023. Nonetheless, export revenue declined by 2.4%, despite the higher volumes. Notably, the exported volume represented 28.5% of total production during this period.
The report underscores the severity of this decline, predicting that "2024 will almost certainly close with the lowest consumption level in our history."
Historically, Argentina's dairy consumption has fluctuated significantly. In 1990, the country recorded an annual per capita consumption of 162 liters, which peaked at 227 liters per capita per year in 2000. Following the economic crisis, consumption fell to 179 liters per capita in 2003, but rebounded to 217 liters by 2015. However, by the end of 2019, consumption had dropped again to 182 liters per capita, before slightly recovering to 194 liters per capita in 2023.
A breakdown of the dairy market reveals that fluid milk experienced a 23% year-on-year decline in June 2024, accumulating a 16.2% drop in the first half of the year. Specifically, non-refrigerated fluid milk consumption fell by 18.5%, while refrigerated milk saw a 12.2% decline. Powdered milk was hit hardest, with a 33% year-on-year drop in June and a 30% decline over the first six months of the year.
The report highlights that while all categories of dairy products experienced declines, long-life milk and powdered milk suffered the most significant drops. Consumers have increasingly opted for more affordable dairy options, further deepening the decrease in consumption, even for lower-priced products.
Cheese, which constitutes 60% of dairy consumption in Argentina, also faced a significant downturn. There was an 18% year-on-year decline in June, with an 11% drop recorded in the first half of 2024.
Other dairy products also saw notable consumption declines during the first half of the year:
Desserts and flans: -53.4%
Yogurt and fermented milk: -21.2%
Butter: -16%
Cream: -12%
Dulce de leche: -13.7%
Milk production itself has been adversely affected, registering a 12.6% year-on-year decline in the first half of the year. This reduction marks the lowest production level in absolute terms in the past 17 years and, on a per capita basis, is the lowest in Argentina's history.
Despite the challenges in the domestic market, Argentina’s dairy exports showed some resilience. June saw a 6% year-on-year increase in export volumes, with nearly an 8% rise in equivalent liters. However, in terms of revenue, this translated to only a marginal 0.1% increase. For the first half of the year, export volumes grew by 6.7% in tons and 13% in equivalent liters compared to the same period in 2023. Nonetheless, export revenue declined by 2.4%, despite the higher volumes. Notably, the exported volume represented 28.5% of total production during this period.
