Colombian Dairy Industry Faces Dual Challenges: Price Rollbacks in 2024 and Consumer Price Surge in 2025
Source: Dairynews.today
The Colombian dairy industry experienced significant turbulence in 2024 as dairy farmers faced substantial price rollbacks, only to be met with a surge in consumer prices for dairy products in early 2025. This dual challenge has intensified the financial strain on producers and raised concerns over market stability.
2024: A Year of Price Declines
In 2024, Colombian dairy farmers witnessed a sharp decline in milk prices, with the average price per liter falling by approximately 12% by year-end, reversing the gains made in 2023. According to the Ministry of Agriculture's Unit for Milk Price Monitoring, the average price per liter in 2024 was $1,971, down from $2,232 in 2023, marking an 11.7% decrease.
The price peaked at $2,352 in March 2023 but steadily declined to a low of $1,906 by August 2024. A slight recovery in the final months brought the price to $1,938 by December, supported by minor increases in both the base price and voluntary bonuses. Despite an 8.4% annual increase in the base price to $1,783, it remained $55 lower than the March 2024 high.
Voluntary bonuses also retreated to $153 by year-end, levels last seen in 2021. Key dairy regions like Antioquia and the Altiplano Cundiboyacense saw average prices, including bonuses, fall to $1,965, a $173 drop from the start of the year. Double-purpose farming regions experienced a $127 decrease, with prices averaging $1,791. Only Norte de Santander, Guaviare, and Nariño saw slight increases.
2025: Rising Consumer Prices Amidst Producer Struggles
In January 2025, DANE reported significant price increases for dairy products, with liquid milk prices rising by 0.82%, cheese by 1.37%, and butter by 2.17%. Dairy derivatives also saw a 2% increase. This surge in consumer prices has placed additional pressure on household budgets, while payments to producers have continued to decline.
Industry Expert Insights
Óscar Cubillos, a cattle economy expert, highlighted the growing disparity between rising consumer prices and falling producer payments. By November 2024, the price per liter paid to producers had dropped to $1,925 from $2,300 two years prior, exacerbating the financial strain on farmers.
Cubillos called for urgent government intervention to stabilize the industry. He emphasized the need for policies that encourage dairy consumption, such as incorporating dairy products into school meals and community programs, and revisiting pricing strategies to ensure fair compensation for producers.
As the industry navigates these challenges, February 2025 market trends will be crucial in determining whether the price surge is a temporary adjustment or a sustained trend influenced by broader economic factors like minimum wage increases. The Colombian dairy sector remains at a critical juncture, balancing producer viability with consumer affordability.
In 2024, Colombian dairy farmers witnessed a sharp decline in milk prices, with the average price per liter falling by approximately 12% by year-end, reversing the gains made in 2023. According to the Ministry of Agriculture's Unit for Milk Price Monitoring, the average price per liter in 2024 was $1,971, down from $2,232 in 2023, marking an 11.7% decrease.
The price peaked at $2,352 in March 2023 but steadily declined to a low of $1,906 by August 2024. A slight recovery in the final months brought the price to $1,938 by December, supported by minor increases in both the base price and voluntary bonuses. Despite an 8.4% annual increase in the base price to $1,783, it remained $55 lower than the March 2024 high.
Voluntary bonuses also retreated to $153 by year-end, levels last seen in 2021. Key dairy regions like Antioquia and the Altiplano Cundiboyacense saw average prices, including bonuses, fall to $1,965, a $173 drop from the start of the year. Double-purpose farming regions experienced a $127 decrease, with prices averaging $1,791. Only Norte de Santander, Guaviare, and Nariño saw slight increases.
2025: Rising Consumer Prices Amidst Producer Struggles
In January 2025, DANE reported significant price increases for dairy products, with liquid milk prices rising by 0.82%, cheese by 1.37%, and butter by 2.17%. Dairy derivatives also saw a 2% increase. This surge in consumer prices has placed additional pressure on household budgets, while payments to producers have continued to decline.
Industry Expert Insights
Óscar Cubillos, a cattle economy expert, highlighted the growing disparity between rising consumer prices and falling producer payments. By November 2024, the price per liter paid to producers had dropped to $1,925 from $2,300 two years prior, exacerbating the financial strain on farmers.
Cubillos called for urgent government intervention to stabilize the industry. He emphasized the need for policies that encourage dairy consumption, such as incorporating dairy products into school meals and community programs, and revisiting pricing strategies to ensure fair compensation for producers.
As the industry navigates these challenges, February 2025 market trends will be crucial in determining whether the price surge is a temporary adjustment or a sustained trend influenced by broader economic factors like minimum wage increases. The Colombian dairy sector remains at a critical juncture, balancing producer viability with consumer affordability.
