Dairy Sector in Bolivia Faces 30% Contraction Due to Rising Costs

The dairy industry in Bolivia is undergoing a severe contraction, shrinking by 30% as production costs escalate. According to the Cámara Agropecuaria del Oriente (CAO), the number of dairy cows in Santa Cruz has decreased from 35,000 to 22,000 over the past decade, leading to a drop in formal milk production from 257,000 to 225,000 liters per day.

Producers claim that they are receiving just over Bs 5.2 per liter of milk, while operating costs have surged due to a shortage of dollars and increased prices for imported inputs. For instance, the cost of balanced feed has risen from Bs 100 to Bs 192 per bag, marking a 92% increase. The real production cost is now estimated to be between Bs 6 and Bs 7 per liter, causing many producers to face bankruptcy.

In Cochabamba, the number of active milk producers has decreased from 5,000 to fewer than 3,000 in recent years. To address these challenges, the Bolivian government has launched the 'Mi Bolivia Lechera' initiative, aiming to increase per capita milk consumption from 69 to 100 liters over the next decade. A significant part of this program includes removing price bands to allow for better cost adjustments in the market.

The initiative will be funded by existing resources from the former Fondo Pro Leche and taxes on imported alcoholic beverages. However, producers like Álvaro Mercado, whose daily production has plummeted from 2,000 to 600 liters, emphasize the need for immediate financial survival amid high inflation of inputs.