Overview of El Salvador's Dairy Industry

El Salvador is a significant contributor to the Central American dairy market, characterized by its robust milk production and strategic trade partnerships. The country's participation in the Central America-Dominican Republic Free Trade Agreement (CAFTA) plays a crucial role in shaping its dairy trade dynamics, especially with the United States.

Dairy Cattle and Milk Production

The backbone of El Salvador's dairy industry is its approximately 550,000 dairy cattle, which contribute to an annual milk production volume of around 550 million liters. This substantial production supports both the domestic dairy market and trade relations within the region.

Milk Processing and Dairy Products

El Salvador processes about 120 million liters of milk per year. Cheese production is notable, with the country producing about 30,000 metric tons annually. However, the domestic production of milk powder and whey is limited, necessitating imports to meet consumer demand.

Dairy Plants and Farms

Prominent dairy plants such as "La Pradera" and "Salvapan" are well-known for their cheese and yogurt production. In addition, numerous small-scale farms play a crucial role in sustaining the domestic milk supply chain.

Trade: Exports and Imports

El Salvador exports dairy products worth approximately $20 million annually, with a focus on cheese and powdered milk products to neighboring countries. Conversely, imports amount to around $50 million each year, with a substantial portion consisting of milk powder and butter. Notably, there has been a 105% increase in imports of U.S. cheese.

Significant Events in the Dairy Industry

In recent years, there have been efforts to modernize El Salvador's dairy production facilities, focusing on quality standards and expanding production capacity. The CAFTA agreement has facilitated access to the U.S. market, affecting the competitive environment for local producers and encouraging investments in technology and infrastructure. However, according to Asileche, the country's dairy production has decreased by 15% due to high production costs.

A noteworthy trade development occurred in May 2025 when Ecuador dispatched 19,000 liters of UHT milk to El Salvador, marking a significant milestone in regional trade relations. El Salvador has emerged as a key market for Ecuadorian dairy products, with Ecuador initiating its first export of whole and skimmed milk to El Salvador, facilitated by the approval of a zoosanitary certificate in April.

El Salvador's dairy importers have announced that wholesale prices for quesillo and hard cheese will remain unchanged in 2026. The dairy market is currently experiencing typical seasonal fluctuations in milk availability. Despite this, the importers' commitment to stable pricing aims to prevent market disruptions and ensure that consumers do not face increased costs for essential dairy products.

Modified: 2026/02/01