Milk Inflation in 2024: Still the Cheapest Drink After Water Despite Price Increase

Milk Prices Resurge Amid Inflation
In December, Argentina's dairy sector saw a stabilization in milk prices due to a resurgence in production, curbing what seemed like exorbitant prices in relation to global competitiveness. Measured in dollars, industry insiders pointed to the challenges faced by exporters due to these high domestic prices.
Price Dynamics in the Dairy Industry
The December milk price was reported by the OCLA at 441 pesos per liter, marking a modest 0.3% increase compared to the previous month. This is starkly contrasted with an INDEC-reported inflation rate of 2.7% for the same period.
Inflation and Market Conditions
Despite a good overall year in 2024, attributed to favorable international grain prices and low export duties, challenges persist. In peso terms, milk prices soared by 125%, surpassing the 117% inflation rate, yet in dollar terms, milk prices and input costs remain favorable.
The Impact of Regulatory Measures
Argentina's current government policies, reminiscent of those from previous administrations, have been criticized for maintaining export taxes that affect the sector's international competitiveness. Dairy producers, having weathered economic storms, face a precarious balance, with little room for complacency despite the temporary respite.