From the 2nd half of march 2020, Argentina began a quarantine global as a preventive measure to the advancement of the infection of COVID-19, joining the global crisis of the pandemic in history that will start in January in China to spread to the rest of the planet. The impact on the dairy sector was important in the northern hemisphere, where the crisis of the market and the collapse of prices they fell right at the peak of its production, as in the case of the United States, where we saw how they threw milk, and implementing measures to reduce the production. For the case of Argentina, the situation was different as they grabbed us in the valley of production (see chart Evolution of the production*) so that when it reaches our peak production (sep-oct-nov), the quarantine will be over, and we will be analyzing the impact on income/consumption, but relieved by an external market are very different to that observed in April-may, at the beginning of the crisis.
In the beginning (April-may) there was talk of lowering price to the producer, in particular for firms with higher export volume on your receipt, but the rest is not accompanied, and the prices were maintained. Now, having an improvement of 22.5% for the values of the milk powder (LPE) projected for spring in July versus may, shifted strongly to the expectation. Putting a floor of 3,000 US$/ton and an exchange rate of 80$/US$ could pay over 20 $/lt.
Exports of dairy argentine shows a seasonality, but they remain an important base of 15,000 tons/month. It is expected that we will find a destination for our surplus by 2020 that will be higher than those of 2019.
From our analysis we conclude that demand for milk will be active and which could be expected increases in the prices of milk to the producer from July/August onwards.
from April 2020, we estimate a transfer of milk Sme cheesy (mozzareleras) to the companies of the circuit formal increasing in some proportion to the volume of milk recorded.
