In the ELEVENTH edition of the digital newsletter for the dairy sector, we can access the update in the month of MARCH 2018 the calculation of Reference values of the liter of raw milk developed under the convention INTA-IAPUCo, a work that constitutes a unique and outstanding contribution to build trust between the stakeholders of the Dairy Chain.
We present the graph that summarizes the dynamics of the supply and demand of the dairy market argentino in the past 17 months. Remember that this information should not be taken as a data point accurate given that it arises from more than 500 models evaluated, and presents a large scatter. It is rather a novel tool for actors in the sector to be ORIENTED to interpret what happens between the supply and demand of milk and observe the TREND that the market holds.
We observe an evolution that started in November 2016. As of February 2017 is a sample of the period lose-lose that covered the 19 months prior to the start of this convention where the price paid for the raw material (blue line) was not covered by the values necessary to cover costs of production of the raw material (dotted line) and exceeded also the possible values of pay for the milk (red line for the Mega and Large-scale Industry and yellow to the Small and Medium-sized dairies). From April 2017 until September 2017, the system begins to generate net positive. For march 2018 remain positive margins for large-scale industry, although declining, while that of the primary production continue to be negative, making the situation worse than it had restarted in September. In march 2018 the cost of milk production continue to your marked rise from January, accusing impact of the shot of the grains, and pressing on the already weakened situation of the tambero. Smes from September 2017 have lost competitiveness due to the fall in the price of the cheese, its main product and continue with the trend. In the next chart, we look at the evolution year-on-year for the month of march in constant currency (updated for inflation to march 2018):
This is reflected in the following graphic that describes the evolution of net values retained for each link. The industrial sector, as of April 2017 he began to generate net values retained positive accumulating in the 17 months of the study period +824 million pesoswhile the sector of primary production accumulates in the same period a loss of –2.065 million pesos. Swept away by the crisis in the primary sector, the system dairy total returns to net values held negative with the aggravating circumstance that the industry also accuses -due to the weight of Smes, which represent the processing of 45% of the receipt total, after 10 months of values retained positive, a loss of -88 million for march 2018:
The sector urgently needs the definition of the purchase of SANCOR at the hands of ADECO to retrieve the competition for the milk, a fact that, as seen in the first graph, it is lost at the beginning of the crisis of the megafirma santefesina in march of 2017.