In the fifth edition of the digital newsletter for the dairy sector, we can access the update in the month of SEPTEMBER 2017 for the calculation of Reference values of the liter of raw milk developed under the convention INTA-IAPUCo, a work that constitutes a huge 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 argentina in the last 11 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 new 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 see there an evolution that started in November 2016. As of February 2017 is a sample of the period lose-lose that spanned the 18 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 the possible values of pay for the milk (red and yellow lines). As of April 2017, the system begins to generate net positive and we find ourselves in SEPTEMBER 2017 with a situation where the curve of price generates positive margins –though decreasing– for the primary production and also for the sector processor (Smes ripped out better then decline and the big industry, generating for July, August and September, a top margin). With a purchasing power of(*) the upper part of the large industry, the evolution of the price of the raw material for the following months will largely depend on how it follows the domestic consumption and the delivery of milk “surplus” that appears to be moderate, taking into account the period January/September 2017 accumulate a volume -8% lower than the same period in 2016. We remind you that as of November MINAGRI will start publishing production information generated by SIGLeA.
It is interesting to observe the evolution of Net Values Retained (VNRS) by each actor of the dairy chain. In the graph below, we see the evolution of these values, for over the past 11 months, noting there a recomposition by the industrial sector which accumulates values from April to positive by +542 million pesos while the industry primary production accumulates negative values for -547 million pesos for the same period analyzed:
