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 involvement in the Central America-Dominican Republic Free Trade Agreement (CAFTA) is crucial in shaping its dairy trade dynamics, especially with the United States.

Dairy Cattle and Milk Production

The backbone of El Salvador's dairy industry consists of approximately 550,000 dairy cattle, contributing 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. Prominent dairy plants such as "La Pradera" and "Salvapan" are well-known for their cheese and yogurt production. Numerous small-scale farms also 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, focusing 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

Efforts to modernize El Salvador's dairy production facilities have been underway, 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.

Legislative Developments

El Salvador's Legislative Assembly has approved significant reforms to the law governing the marketing of breast-milk substitutes. The changes aim to align national regulations with international health standards and promote exclusive breastfeeding. The reform mandates that all substitute products feature clear and visible warnings about the superiority of breast milk and potential health risks of unnecessary substitute use. Additionally, it imposes strict restrictions on marketing strategies used by the dairy and infant nutrition industries.

The government of El Salvador has presented a legislative proposal seeking to lift the current ban on the commercialization of milk, cream, and cheese made from reconstituted or recombined powdered milk. This initiative, driven by the Ministry of Agriculture and Livestock (MAG), intends to amend Article 21 of the Law for the Promotion of Hygienic Milk and Dairy Products Production, which has been in effect since 1960.

El Salvador's Legislative Assembly has approved a reform allowing the use of powdered milk in production. This legislative change is seen as a strategic move to improve the nation's milk supply chain, aligning it more closely with regional practices across Central America. The reform is expected to address issues of supply by diversifying the sources of milk available for production. Currently, a significant portion of El Salvador's milk imports come from Nicaragua. By enabling the use of powdered milk, the government aims to reduce this dependency, thereby enhancing food security and potentially stabilizing prices within the local market.

Modified: 2026/06/28