In the 28th edition of the digital newsletter for the dairy sector, we can access the update in the month of AUGUST 2019 the calculation of Reference values of the liter of raw milk developed under the convention INTA-IAPUCo, a work that constitutes a contribution unreleased and featured to generate transparency for the stakeholders of the Dairy Chain. All values presented here were adjusted for inflation rate wholesale using the IPIM (Index of Wholesale Prices Internal) of the INDEC becoming the current prices published by IAPUCo in constant prices of August 2019. This helps for a better understanding of the factors operating in the market.
We present the graph that summarizes the dynamics of the supply and demand of the dairy market argentino in the past 34 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.
The analysis starts in November of 2016. Up to march 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 that are needed to cover the 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 generated net positive. But as of January 2018 the costs of producing milk copied the evolution of inflation while the price received by the producer as well as the reference values in industrial lost purchasing power of accumulating negative balances up to march 2019, a month, from which, and after 16 months, the chain began to accumulate positive balance.
For August 2019, the price of milk to the producer fell in their purchasing power after 6 consecutive months of rising, and in dollars having come to exceed 0.35 dropped to 0.28 US$/lt. Any way the price is still above the cost of production of the models of the INTA.
For the industrial side, he turned to the table and now the Smes, mostly catering to the domestic market, fell significantly in their purchasing power, seeing with relief the stop of the price of raw material. Meanwhile, the Big industry reacomodó the box going to a purchasing power of more than the price paid thanks to adjustments in price list and its link with external market.
The values retained net (VRN) for the Dairy Chain were positive for the sixth time, until July thanks to the marked improvement obtained by the link primary production, but by August, both links provide positive balances.
For September, there were some price increases, but there is a stand by as waiting to see what makes the curve production of spring that has already been attenuated by the dry and the cold, unusual for the season, and obviously the question of the policy that defines this month. The rains necessary and much-anticipated are given by areas randomly. For the cows, the environment has been ideal for the no field. We look forward to a accumulated in the last third production of the year similar to the 2018 and perhaps the total annual 2019 slightly below that of 2018.
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