Dairy Product Sales Surge in Argentina as Sector Recovers

Dairy Sector Bounces Back

The Argentine dairy industry experienced a remarkable recovery in January 2025, with sales of dairy products showing a significant rebound of 17.4% year-on-year in volume, as reported by the Argentine Dairy Chain Observatory (OCLA). Moreover, there was a 7.4% improvement compared to December sales figures.
This resurgence marks a positive shift for a sector that endured a challenging 2024, particularly in the domestic market. However, experts have cautioned that the impressive growth figures must be viewed in context.

Contextual Analysis

According to the OCLA, while January 2025 figures appear promising, they are contrasted against a notably low base in January 2024, when consumption dropped by 17.7%. Therefore, the latest growth should be contextualized as a return to early 2024 levels rather than unprecedented expansion.
Sales of fluid milk increased by 13.1%, powdered milk climbed by 33.2%, and cheese sales rose by 10.6% on a year-on-year basis.

Currency Concerns and Market Implications

The OCLA warns of potential overproduction and market oversupply if current trends continue unaddressed. The current exchange rate situation, where the Argentine peso lags behind the US dollar, is a concern for the export potential of dairy products. The delayed exchange rates pose a threat to the financial health of the sector, especially in light of an internal production recovery.
Future projections suggest that aligning domestic product prices with rising wages will be crucial in mitigating oversupply risks. Despite favorable international dairy prices, export expectations remain dampened by these currency challenges. A 21% year-on-year drop in dairy exports in January 2025 illustrates these currency-related hurdles.

Conclusion

The Argentine dairy sector stands at a crossroads, needing strategic adjustments to sustain growth amidst challenging exchange rate dynamics and potential domestic market saturation.