In the 22°
edition digital newsletter for the dairy sector, we can access the update in the month of FEBRUARY 2019 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 generate transparency for the stakeholders of the Dairy Chain. All the values here presented were adjusted for the 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 march 2019. This provides 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 28 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.
As of February 2019 the producer prices was the largest in the series arrimándose year 2014 year prior to the crisis, marking a significant recovery enabling us to cover the costs of production of the models which was not the case since August, 2017.
For the industrial side, for the first time in the series, Smes showed a purchasing power of more than the large-scale Industry (+1,4%). Since September 2018, both industrial segments are paying in excess of their capacity at the expense of costs imputed (not provided).
The values retained net (VRN) for the Dairy Chain to remain negative, but reversed the trend of declining -63% loss from the previous month. The sector of primary production takes the worst part assuming the tambero 69% of the accumulated loss of the sector for the entire series.
Without a doubt, the poor production, the product of many months of work loss, combined with increased exports and increased competition from February 2019 with the entry of AdecoAgro to the market for sale and purchase of raw material, generating for the first time in a long time, improvements in the price tambero with substantial increases in their purchasing power. Keep this level of fit and putting the value of the raw materials close to 30 hp US$/litre of milk is to wait for a recovery of the production, reversing the negative trend in year-on-year observed in the first quarter of 2019.
