Monitoring of the relative prices of dairy production regional

Here we present periodically the evolution of the price of milk to the producer, and the main inputs that affect the dairy industry in Argentina, Brazil, Chile and Uruguay. In this regional monitoring follow the evolution of the relative prices of key inputs that affect the activity of dairy production in the region as it is the Corn (the thermometer features food that takes more than 50% of the direct costs), the Diesel (impacts minimally on a 15% on cost of production), the Us dollar (more than 70% of the inputs of the activity listed in dollars), the Soy (the value of which affects the protein source of the rodeo dairy and, in almost all cases, the payment of the rent of the land in production (for the chilean case we use Wheat in place of soy) and the price of milk.
Then you will find a graphic with the Evolution of the Index of Costs compiled for ease of comparison, and also a comparison chart with the relative evolution of the producer prices by country. Finally a graph of input/output showing the pounds of corn that can be purchased with 1 lt of milk in each of the countries, as well as the current values of milk and corn to the producer.
We're using the month of January 2021 as a starting point for the evolution of relative prices. From the graphs it is noteworthy, the increase experienced by the gas in all cases with respect to the milk, but it is considerably more marked for Chile and Brazil. This is connected with the escalation of oil, the world level grew by +47% in 2022). Feeding costs are shown growing in all cases, while the price of milk to the producer is going to be fine-tuned from February. The argentine case is marred by a scenario of high inflation (60,7%), and type of change that is late, compared to Brazil (11,7%), Chile (11.5) and Uruguay (9,37%) which complicates the analysis.




In the following charts, we see a compilation of the data generating the Index of Costs and the Rate of milk Prices in dollars. In the first we can observe that the producers from argentina and chile are the ones who are suffering most of the increase in costs, followed by the brazilians, uruguayans, whose exchange rates remain stable.

In the costs of feeding the countries that presented the best value for purchase of corn per liter of milk (chart Kg Corn/lt Milk) are Brazil with 1,74 kg/lt, followed by Argentina with 1,48 kg/lt, Uruguay 1,45 kg/lt, and Chile with 1.31 kg of corn/lt of milk. The calculations correspond to the month of April 2022, month that we have all the prices of milk to the producer, except Chile, which has not yet updated the data price of march.



Marcos Snyder
