Higher Quality Milk Fetches Better Prices for Dairy Farmers
An analysis by the Technical Dairy Board of CREA has revealed that dairy farms producing milk with higher concentrations of solids, such as fat and protein, are achieving better prices. The study, conducted by María Luján Rodríguez and Rodrigo Aranguren using data from CREA's Dairy Radar, examined the relationship between the price received by producers and the content of useful solids during April over the past five years.
To ensure accuracy, the study analyzed prices expressed in dollars per liter to avoid distortions caused by inflation or macroeconomic changes. According to Gonzalo Berhongaray, leader of CREA's Dairy area, there is a positive and statistically significant correlation between useful solids and price in all analyzed years. This means that, generally, farms with higher solids content receive better prices.
The strongest correlation coefficient was recorded in April 2026, at 0.61, the highest in the entire series analyzed. The average correlation over the last five years was 0.53, confirming a sustained relationship between compositional quality and milk valuation. However, CREA emphasized that solids content is not the sole factor influencing price differences among farms.
Through multiple regression models, other variables such as production scale, geographical location, and logistics were also found to influence prices. Berhongaray noted that the price received is a combination of factors, including milk compositional quality, production scale, location, and logistical considerations.
Additional elements like specific commercial conditions, specific bonuses, and additional quality attributes defined by each industry also play a role in determining price. The CREA Dairy Radar data indicates that in the 2026 campaign, the relationship between useful solids and price was the strongest in the past five years.
Although it's too soon to conclude that the industry is universally paying more for quality, farms with a higher concentration of solids are achieving better valuation for their milk, according to Berhongaray.
