Slow Growth and High Costs Hamper Dairy Development in Chile

Despite a recovery in milk production in the past two years, the Los Lagos region in Chile, known as the country's largest contributor to the dairy industry, is not growing as expected. Factors hindering growth include a lack of effective producer cooperation and high costs. According to Federacion Nacional de Productores de Leche (Fedeleche) and Odepa data, national milk production increased by 3.2% in January 2025, compared to January 2024, reaching 214.4 million liters. Los Lagos and Los Rios regions account for 84.4% of the dairy industry receipts, with Los Lagos increasing milk production fr om 101.43 million liters to 104.4 million liters.

Producer cooperation, perceived as a synonym for success, remains underdeveloped in Los Lagos, affecting the potential to increase milk volumes. According to Anita Jans, manager of Aproleche Osorno, producers in Los Lagos need financial tools and support to grow. High production costs, particularly in electricity and labor, further squeeze margins. Despite no signs of price increases, producers remain hopeful due to international trends wh ere Chile ranks lower in milk prices.

Jaime Altamirano, president of the Red de La Leche y la Carne network, emphasizes the need for structuring associations on a vertically integrated model like Colun to succeed, benefiting from better returns and supply advantages. Challenges persist, requiring consistent industry growth policies and growth incentives for medium-sized producers.