El Salvador's Dairy Industry Overview

El Salvador stands out as a key player in the Central American dairy market, characterized by its significant milk production capabilities and strategic trade relations. The country's involvement in the Central America-Dominican Republic Free Trade Agreement (CAFTA) plays a crucial role in shaping its dairy trade dynamics, particularly with the United States.

Dairy Cattle and Milk Production

El Salvador's dairy industry is supported by approximately 550,000 dairy cattle, contributing to a milk production volume of around 550 million liters annually. This robust production underpins the country's domestic dairy market and its trade relations within the region.

Milk Processing and Dairy Products

The country processes about 120 million liters of milk per year, with a notable production of cheese, amounting to 30,000 metric tons annually. However, there is limited domestic production of milk powder and whey, leading to a reliance on imports to meet demand.

Dairy Plants and Farms

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

Trade: Exports and Imports

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

Significant Events in the Dairy Industry

Recent years have seen efforts to modernize El Salvador's dairy production facilities, emphasizing improvements in quality standards and the expansion of production capacity. The CAFTA agreement has enhanced access to the U.S. market, influencing local producers' competitive environment and spurring investments in technology and infrastructure. However, according to Asileche, the country's dairy production has decreased by 15% due to high production costs.

In a noteworthy trade development, Ecuador dispatched 19,000 liters of UHT milk to El Salvador in May 2025, marking a significant milestone in regional trade relations.

Modified: 2025/07/25