In a context in which the argentine economy begins to show concrete signs of stability, the dairy sector is facing the opportunity to reorient its strategy of analysis to fundamental aspects of the production that have been postponed in previous stages, dominated by the volatility of exchange rate. Historically, the predominant concern in the dairy argentine was associated to the uncertainty generated by the constant fluctuation of the exchange rate and inflation, a factor that played a role in decisions and investments. Today, with a scenario of increasing the economic predictability, it is crucial to return to the in-depth analysis and thorough of the cost structure as the central axis to ensure the sustainability and competitiveness of the dairy business.
This new stage requires that producers and industrial recognize the strategic importance of identifying and efficiently monitor each component of the cost productive, from the feed to the deployment of technologies and systems of monitoring, with the aim to optimize the performance and to prepare the argentine dairy farms for the future challenges of the local and international market which will require milk.
In a scenario with a stable dollar and low inflation there is consensus that the price of milk to the producer found his new level...which for years were 0,30 US$/lt the current and future located this average value at 0.40 US$/lt. In the box “Projection” indicators we can see an estimation of its evolution in the coming years (2025 to 2030):
In this context, the business will not be defined by financial success, such as a contract of purchase of feedstock pre-devaluation, but because of the technical efficiency of the processes.
With respect to the feeding costs we need to point out that the eventual total elimination of export duties would lead to a variation in the terms of trade between the milk and the corn, taking this relationship from its high current level, to values close to the historical average, around 2 kg of corn per liter of milk (see figure “Frequency of the relationship corn and milk”) . Although this would represent a reduction in the ability of current purchase, would not necessarily imply a deterioration critical or unpublished, since historically the dairy sector argentine achieved sustained increases in production under similar conditions.
This standardization in the terms of trade would force the producer to refocus their efforts towards a higher production efficiency and better management of costs, but not as an extraordinary situation in historical terms, since for long periods, the drums have been operated successfully in scenarios equivalent.
Also the argentine producer will have an unprecedented financial tool to incorporate technology in their production processes that will help significantly to increase efficiency and reduce costs. Among the technology we have as necklaces monitoring, doors apartadoras, roofs, sheds, automation, robotics, etc, “The banks return to work of banks”.
