Colombia: Milk Prices Set to Increase by 5.36%

Historical Increase in Milk Prices

The National Dairy Council of Colombia has confirmed that the base price of milk will increase by 5.36% starting March 2025. This adjustment, a result of the annual review based on the Dairy Sector Composite Index (ICSL), surpasses last year’s adjustment of 3.56%. This change aligns the milk pricing with the market dynamics of the dairy sector in Colombia.

Background and Implications

The ICSL, established as per Resolution 017 of 2012, determines annual changes in milk pricing. The 5.36% increase will be effective until February 28, 2026. The Ministry of Agriculture and Rural Development presented the data during a session with the National Dairy Council. The update considers various market factors, including input costs, international market trends, and inflation indices related to dairy products.

This adjustment is expected to benefit milk producers by providing higher returns for milk quality based on composition metrics such as fat, protein, and total solids. Additionally, hygienic quality bonuses are awarded based on bacterial counts, promoting better milk quality.

Comparative Analysis

This year's adjustment exceeds previous years. Notably, 2021 saw two adjustments due to escalating input costs fueled by price surges of more than 40-50% for various agricultural supplies. The intervention by the Colombian Federation of Cattlemen (Fedegán) facilitated this exceptional adjustment to improve profitability for dairy farmers.

Future Outlook

Dairy producers are optimistic that this price adjustment will bolster the sector's stability amid fluctuating market conditions. The industry views this as a positive step towards sustaining profitable operations for milk producers in Colombia.