Argentina’s Milk Price Rose 13%, Lagging Inflation by 20.5 Points
CONINAGRO’s August input-output report compares the purchasing power of milk with the cost of goods and services used by dairy farms. The nominal payment increased 1.5% from July, but the report said its real value was among the weakest of the past decade. Inflation accumulated 21.3% between January and August, according to Argentina’s national statistics agency, INDEC.
Fuel recorded the sharpest deterioration among the measures examined. A farmer needed the value of 4.7 litres of milk to buy a litre of diesel, 53% more milk than a year earlier. The ratio was also 44% above CONINAGRO’s historical reference average.
Labour costs showed a similar movement. Covering the wage of one rural worker required 2,209 litres of milk in August, 369 litres more than in August 2025. The milk-to-wage relationship worsened by 20% year on year and stood 33% above its average for the previous five years.
Livestock replacement also required more milk. Buying a replacement heifer aged between 12 and 14 months cost the equivalent of 2,559 litres, an increase of 396 litres over the year. For a good-quality cull cow, the requirement reached 4.6 litres per kilogram of live weight, 19% higher than a year earlier and 33% above the report’s historical benchmark.
Feed costs produced mixed results. At a reference price of $187 per tonne, a tonne of maize required 531 litres of milk. That ratio deteriorated by 5% year on year and was 4% above its historical average. Lucerne seed was the exception: one kilogram required 18.4 litres, about seven litres fewer than a year earlier. The ratio improved by roughly 27-28% and was about 6% below its five-year average.
The report measures purchasing relationships rather than the complete cost of production. It does not incorporate every farm’s structure, scale, productivity, rents, energy use, depreciation or other operating conditions. CONINAGRO said the indicators show how many litres are needed to obtain particular inputs, rather than establishing a farm’s total cost per litre.
The deterioration occurred while Argentine milk production was expanding. Output rose by about 4.5% year on year during the first eight months of 2026, with additional supply directed significantly towards exports. The report recorded that increase alongside the weaker relationship between milk and several key inputs. In August, the milk price was 535 pesos per litre, while diesel, wages, replacement animals and maize all required more milk than a year earlier to purchase the same references.
