Milk Production in Argentina Increases but Prices Stagnate, Leading to Losses
Source: dairynews.today
Argentina's dairy industry faces economic challenges as milk production rises by 10% between January and March, yet prices increase at a slower pace than inflation.
In recent months, milk producers in Argentina have started expressing concerns over their economic situations. Despite a 10% increase in raw milk production between January and March of the current year compared to the same period in 2024, the rise in milk prices has not kept up with inflation rates.
As per official statistics, the average price of milk was recorded at 453 pesos per liter in March, showing a marginal increase of 1.3% from the previous month's 440 pesos, while inflation was three times higher at 3.55%. Over the last year, raw milk prices increased by 37%, yet inflation surged to 56%. An industry report indicates a positive outcome of 6,022 million pesos in the industrial sector, but a substantial 22,610 million pesos loss in the primary sector. The break-even price to cover all operational and capital opportunity costs is estimated at around 480 pesos.
Gustavo Augel, a Lobos producer and dairy coordinator at CARBAP, cautioned about the lag in milk prices compared to inflation and the ensuing economic uncertainty: "The price has not been keeping up with inflation for approximately two to three months, causing yellow alerts." With major operations such as silo harvesting and green planting underway, Augel noted, "The dairy sector maintains production levels, but enterprise numbers are dwindling, with only just over 9,000 remaining." The ongoing trend sees larger farms expanding while medium and small enterprises continue to disappear.
As per official statistics, the average price of milk was recorded at 453 pesos per liter in March, showing a marginal increase of 1.3% from the previous month's 440 pesos, while inflation was three times higher at 3.55%. Over the last year, raw milk prices increased by 37%, yet inflation surged to 56%. An industry report indicates a positive outcome of 6,022 million pesos in the industrial sector, but a substantial 22,610 million pesos loss in the primary sector. The break-even price to cover all operational and capital opportunity costs is estimated at around 480 pesos.
Gustavo Augel, a Lobos producer and dairy coordinator at CARBAP, cautioned about the lag in milk prices compared to inflation and the ensuing economic uncertainty: "The price has not been keeping up with inflation for approximately two to three months, causing yellow alerts." With major operations such as silo harvesting and green planting underway, Augel noted, "The dairy sector maintains production levels, but enterprise numbers are dwindling, with only just over 9,000 remaining." The ongoing trend sees larger farms expanding while medium and small enterprises continue to disappear.
