Agri-food: the consumer paid $3.2 for every $1 received by the producer

The agricultural food prices multiplied by 3.2 times from the field (origin) to the shelf (destination) in August. That is, the consumer paid $3.2 for every $1 the producer received, according to the Origin and Destination Price Indicator (IPOD) prepared by the Regional Economies sector of the Argentine Confederation of Medium-sized Enterprises (CAME).

On average, the Producer participation accounted for 30.9% of final sales prices, 13.4% less than the previous month. The largest share was held by producers of chicken (52%), while the lowest was again for those of lemon (6.5%).

During the month of August 2024, as a result of the decrease in purchasing power and the lack of price validation by the consumera drop in demand of around 35% was observed. As these are generally perishable products, the situation forced different links in the value chain (wholesalers and retailers) to give up part of their income. In addition, the Increase in costs of both dollarized inputs, municipal taxes, as well as transportation, logistics, leasing, fuel and salaries, to name a few.

On the other hand, a crisis is taking place uncertainty -natural at this time of year-, where some regions enter the market with their production, while others are withdrawing.

Finally, after the strong frosts that had reduced the supply, this month production levels increased and, as a result, a decrease in the prices of several products in the IPOD basket, which explains the decline in the product’s share.

Agrifoods: largest and smallest gaps in August IPOD

Products with the largest monthly IPOD gaps

He lemon (15.4 times), the tangerine (10.5), the pear (6,8), the lettuce (5.9) and the red apple (5.8) were the five products that presented the greatest difference between origin and destination prices.

He lemon increased by 1% at origin and 17.4% at destination, going through a critical situation for some time. Due to the lack of sales, some producers decided not to harvest, because the price paid by the industries does not cover the production costs.

The prices of the tangerinefor their part, also increased at both ends of the chain: 1.4% for the producer and 14.8% for the consumer. Consumption has fallen significantly and there is an excess of supply, given that it has been a very good campaign in terms of quality and volume. At the same time, the industries cannot process all the fruit, so it is spoiled and discarded, and the prices – which showed an improvement with respect to the previous month – also do not cover the costs of production and packing sheds.

In the case of pome fruits, both the apple like the pear They showed increases at destination (1.7% and 4.3%, respectively), while at origin they showed dissimilar behavior: the first increased its price to the producer (20.7%) due to the quantity of cold storage fruit on the market, but the pear had a monthly drop of 5.5% due to low demand and an adjustment with respect to the previous month.

Finally, there is the lettucea product that decreased for both the producer (39.3%) and the consumer (0.1%), due to an increase in the quantities offered.

Agri-food: products with smaller monthly IPOD gaps

Of the five products that showed the smallest difference between the price received by the producer and the price paid by the consumer, three are part of the fruit and vegetable basket and two are part of the animal origin basket.

With 1.9 times, the chicken It was the product with the smallest gap in the month of August, increasing its prices at origin (18.5%) and decreasing 0.6% at destination. eggs (2), on the other hand, increased by 5.4% on the shelf, but decreased by 1% for the producer. It is worth mentioning that both products are being produced with variations in structural costs, since the raw material for balanced foods is experiencing a drop in price.

As regards horticultural products, the zucchini (2.1) showed a decrease in its prices both at origin (37.7%) and destination (34.2%), as a consequence of the frosts that affected its quality. On the other hand, the pepper (2.4) showed the same behavior, showing a decrease in producer prices (25% due to increased supply) and consumer prices (4.5%).

Finally, the only fruit that was among the products with the smallest gap between the field and the shelf for the month was the strawberry. With 2.3 times, its price at destination decreased by 16.1%, but increased by 1.2% at origin.