The recession and the fall in consumption continues to affect producers. In the meantime, withholdings from the industry remain suspended.
The effects of recession in the fall of consumption are not alien to milk sectorwhich, conditioned by the decline in sales, recorded a decrease of 14.5% in milk production during the first four months of the year, according to data provided by the Observatory of the Argentine Dairy Chain (OCLA).
The situation picture shared by OCLA reflects that the collapse in milk production in Argentina goes against the grain of the vast majority of the main dairy producing countrieswhich in the same period have increased productivity.
On the world average, lMilk production grew by 0.68% in the first four months of the year. The greatest advances were recorded in Türkiye and Belarus, with increases of 8.5% and 8.2% respectively. The podium was completed by Australia with an increase of 4.8%. The only country that accompanied Argentina in the negative record was New Zealand, which had a decline of 0.7%.
From OCLA they indicated that “a selected group of the main countries that represent around 55% of the world’s production of cow’s milk is taken, in which an increase in production of 0.68% can be observed, for the 1st quarter of the year 2024 compared to the same period of the year 2023”.
Cows Livestock
Ignacio Petunchi
Why milk production fell
The drop in production is directly linked to the fall in consumption, since climatic conditions normalized after the drought of the last three years. In this sense, dairy sales to the domestic market accumulated a decline of 17.2% in volume and 13.7% in equivalent liters of milk in the first four months of 2024.
The suspension of withholdings on dairy products continues
Faced with this complex panorama, the Government decided extend the suspension of withholdings to exports of dairy products for one more year, as anticipated by the national director of Dairy, Sebastián Alconada, during the international seminar of the sector held at the Rafaela Rural Society, province of Santa Fe.
The measure had been promoted during the administration of Alberto Fernández, and renewed at the beginning of Javier Milei’s administration, by extending it in January for six months. With the new extension, dairy exports will not pay taxes until June 30, 2025, which will accumulate a total of 20 months without being affected by the tax.
Alconada maintained that “This extension provides stability and confidence to producers and exporters, allowing them to continue generating value and expanding their products globally” and announced that “the long-term objective would be the definitive elimination of these withholdings.”
Source: Ambito
