The market for the purchase and sale of raw milk in Argentina is experiencing an unusual increase in price in an expression of the lack of milk, combined with the increase in exports and the reconfiguration of the market share that underpins the reactivation of the competition for the local raw materials. In the chart below we see the substantial improvement in the purchasing power of the milk in constant currency, at which time they are pulled to the 30 hp dollar/litre and mark –with 32.3 per cent– the best involvement on the consumer products of the last few years:
The domestic market is pushing the whole chain to improve its productive efficiency, the producers kept in activity must have improved quite a bit, and now it's up to the industry to lower its costs and inefficiencies in order to stay in the game (payment for solids and reduction of freight among other things), as the price of the milk seems to have ceased to be an adjustment variable.
How far can you climb the price in dollars?... The following graph shows the frequency of price in constant dollars over the past 10 years. There we observe the history prior to the new scenario where 73% of the cases (cases= monthly averages) was between 24 and 30 hp US$/litre. There was a 14% of the months analyzed with values between 32 and 36 hp US$/lt. mostly observed in 2017 (full), and half of the year 2010.
