Dryness is reducing the quality of forage in Argentina [News South America n°1/2020]

Period: December 9, 2019 – January 3, 2020

In the past couple of weeks, hotter climate conditions prevailed in Argentina, causing dryness in several dairy areas, reducing the volume and quality of forage. However, grain stocks remain broad throughout the continent at affordable prices for dairy operators.

Milk production at farm level is seasonally declining in Argentina and Uruguay, but has stabilized in Brazil. Apart from Brazil, milk intakes are enough to cover most processing needs. However, cream volumes are still too short to entirely satisfy the demand of favourite summer dairy products, such as ice cream and frozen desserts. Indeed, the levels of butterfat and protein component are lower because of the warm summer temperatures affecting cows’ comfort.

In Argentina, the newly elected president announced a possible implementation of export tariffs on agricultural commodities, including corn, soybean, dairy powders, among others, as a measure to increase government revenues. The imposition of this measure could discourage production and export of these products.

Skim Milk Powder (SMP) export prices adjusted down in line with WMP bearish pricing trends. SMP demand from the food processing industry is good, but less strong compared to the past quarter (Q4) manufacturing. SMP production is active and stocks are slowly growing.

Export prices for Whole Milk Powder (WMP) adjusted down. WMP production is active, but not at full capacity, since the supply milk is moderate. Consequently, WMP inventories are steady to slightly building.

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CLAL.it - Price of SMP and WMP in South America

CLAL.it – Price of SMP and WMP in South America

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 CLAL.it

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The CLAL.it 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, News South America, South America