
Spring is here with force, after a number of years, and tap on the processing capacity of the local industry. With a production in August reaching 35 million litres per daythe sector faces the classic paradox: an abundance of raw material in a domestic market that is unable to absorb the wave. The impulse productive this year has an additional explanation. After a winter with heavy rainfall generous, the soil profiles have an optimum moisture, which fired a forage supply of unusual pasture and verdeos. With the increased availability of high quality food growing in the field, the drums boosted their productivity. The result is a wave of milk, about 4 million litres per day, up from the reception of milk of two months ago, which is reflected in the accumulated surplus of cheese between January and August 2025 estimated 16.500 tonnes of additional over the same period in 2024. (see the chart “Evolution of the production of milk” and the monitor stocks of dairy products to August 2025)


The bottleneck appears in the cheese industry that processes 50% of the milk in Argentina. Plants medium-sized with a smaller capacity of export and the girls domestic market dependent processed to the limit, with plants saturated and balances fragile. Some complications presented in such companies as Veronica and The Suipachense, among others, in difficulty and in many cases resort to “drop of milk”, that is to say, to derive a reference to a third party or directly stop to collect the milk.
The oversupply hits on all the internal market, where prices of cheeses of mass consumption are depressed by the oversupply (on average Total System IAPUCo for July-7.2% in on constant prices in July 2024). The abundance of goods agrees to liquidate stock to lower the value required by the high financial cost that conspires against the possibility of stockear cheeses. With high rates and need of working capital immediately, many industries are forced to sell quickly, beginning to resign price, in order to sustain the cash flow. And the consumer accepts the highest bid at a lower price to increase purchases in domestic market +8,1% over jan-aug 2024.

In contrast, the international market even with its ups and downs offers pricing sustained. Fortunately, the exports of dairy products have been growing from may accumulate +3.4 per cent over same period 2024 (see chart), providing a respite in an external scenario that, as always, shows high volatility. We'll see what happens with mozzarella whose price declined in September, complicating the export to Brazil

The big players have a strategy to export the excesses of receipt of lighthouse long and are sold in a business that is attractive thanks to the prices sustained in the international market and the low prices in dollars for the raw material. The business of milk powder to Brazil remains attractive showing wide margin between the wholesale price brazilian and the FOB argentina. The medium-sized and girls with lower volume exported tied to a domestic market on stocked. For the producers, the picture is complex, since the stagnation in the price of raw materials and the marked growth of the feed costs. Analyzing the average cost of three production systems, we observe that in September 2025 grew +8% on August 2025 and +22% over September 2024 eroding margins and forcing them to review the schemes of production in order not to lose money. The short-term promises more pressure: September and October be the months of maximum production.
The spring, which agronomically is a period of abundance thanks to the pasture, it becomes a real challenge to commercial and industrial. The question that flies over the whole chain is clear: how do you transform this wave of milk into an opportunity and not a threat to the sustainability of the system? An abundance of milk well managed would be a lever to grow. The production system of argentina is largely based on the grazing and generates a curve with marked seasonality in the supply of milk (we suggest you read our notice regarding the seasonalityif the industry does not extend the ability to process the peak annual production, and export it we will not go roller supplier of domestic market all criticize but do not solve. Surely access to financing with rates appropriate for these projects will be key to bring forward the necessary investments.