Dairy Farmers in Argentina Experience 40% Revenue Surge in Dollars
Source: dairynews.today
The revenue of Argentine dairy producers surged by 40% in USD over the past year, reflecting a significant change in dairy production and export dynamics.
In Argentina, dairy farmers are seeing an impressive 40% increase in their income measured in USD between January 2024 and January 2025.
This leap raises questions about economic impacts and sustainability under President Javier Milei.
Despite being the recent poster child for selling the cheapest milk globally, Argentine dairy producers have quickly transitioned to one of the highest prices within a year, mirroring broader economic shifts post-devaluation.
While farmers rejoice, it's also important to remember the preliminary conditions like the previous year’s milk shortage due to a drought, which propelled prices upwards despite the decreasing total annual production by 5%.
Internationally, milk was reportedly priced at $0.36 in Uruguay and New Zealand, $0.45 in Chile, $0.43 in Brazil, $0.50 within the EU, $0.51 in China, and $0.49 in the US. In Argentina, prices measured in dollars reached $0.429 per liter by February.
The positive side for farmers is improved buying power. In the national market, the price increased by over 80% when measured in pesos, as compared to the USD 40% change, indicating an underlying currency valuation mismatch.
As the dairy sector benefits from higher commodity prices, this surge is amplified by exchange rate dynamics, showcasing income as a misleading metric if isolation of exchange effects is overlooked.
This demonstrates a deceptive 'mirage of wealth' factor, seen across other sectors when peso appreciation against USD distorts value.
Currently, Argentine dairy farmers revel in the revenue increase, but the sustainability of this economic landscape remains in question, poised at the mercy of currency values shifting once more.
This leap raises questions about economic impacts and sustainability under President Javier Milei.
Despite being the recent poster child for selling the cheapest milk globally, Argentine dairy producers have quickly transitioned to one of the highest prices within a year, mirroring broader economic shifts post-devaluation.
While farmers rejoice, it's also important to remember the preliminary conditions like the previous year’s milk shortage due to a drought, which propelled prices upwards despite the decreasing total annual production by 5%.
Internationally, milk was reportedly priced at $0.36 in Uruguay and New Zealand, $0.45 in Chile, $0.43 in Brazil, $0.50 within the EU, $0.51 in China, and $0.49 in the US. In Argentina, prices measured in dollars reached $0.429 per liter by February.
The positive side for farmers is improved buying power. In the national market, the price increased by over 80% when measured in pesos, as compared to the USD 40% change, indicating an underlying currency valuation mismatch.
As the dairy sector benefits from higher commodity prices, this surge is amplified by exchange rate dynamics, showcasing income as a misleading metric if isolation of exchange effects is overlooked.
This demonstrates a deceptive 'mirage of wealth' factor, seen across other sectors when peso appreciation against USD distorts value.
Currently, Argentine dairy farmers revel in the revenue increase, but the sustainability of this economic landscape remains in question, poised at the mercy of currency values shifting once more.
