Argentina: higher margins for Dairy farmers [News South America n°12/2020]

Period: August 3 – 28, 2020

In Argentina, Uruguay and Chile, Milk production continues to increase mainly due to improved weather conditions and good quality pastures. The increase in Milk production is expected to continue during the spring season. - Milk Deliveries Argentina – Milk Deliveries Argentina

The increase in production and the moderate operating costs helped to support farmers’ margins, even as farm-gate milk prices remained steady.

Raw milk supplies are enough to meet dairy processors’ needs. The industries in the sector are producing more UHT Milk to meet the needs of consumers, moreover, the production of cheese destined for pizzerias and restaurants is becoming more active as the food service sector continues to slowly reenter the economy.

Brazil-0.5% milk production January – June 2020 y-o-y

In Brazil, the dry climate, which has persisted for several weeks, is hampering the growth and the quality of pastures. As a result, milk production is lower than last year (January – June -0.5%). According to some operators in the sector, the climate situation is expected to improve in the spring season. 

Unlike the rest of South America, in Brazil, raw milk volumes are less than enough to meet most processing needs. Dairy manufacturers continue to prioritize the production of UHT milk over other dairy products.

In the past couple of weeks, no major changes had happened in the South American skim milk powder (SMP) market, reflected on steady export prices.

WMP export prices, on the other hand, are decreasing: with more milk available for dryers, the amount of WMP on the market is increasing, leading to a surplus. 

Some operators manage to export the WMP produced in excess, exploiting the weakness of the local currency. In Argentina, the export of WMP continues to be strongly positive, recording in July an increase of +185.6%. The main purchasing country remains Algeria.

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on > - Export WMP Argentina – Export WMP Argentina

Source: USDA summarized by the CLAL Team Note: assessments about market trend are expressed in US$ More informations about dairy market in Argentina, Brazil and Chile are available on

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The team is composed of young people who with the help of Computer Science study the dairy market and develop tools to provide the Operators of the dairy sector with a comprehensive real-time view of the national and international market trends.

Posted in Argentina_en, Brazil, News South America, South America