Dairy argentina rearranges itself: there are signs of recovery in a new economic scenario
2025 started with encouraging signs for the dairy production in argentina. After 2024, which left deep traces in the sector —particularly in its first half— the first three months of this year show a cumulative growth of +10.9% in the production of milk compared with the same period of the previous year (see graphic “milk Production in Argentina”). This spike, however, should be read with caution: it relies on a comparative basis weakened, which will smooth your impact percentage as the year progresses. The projections point to a total increase of +5% to 2025, consolidating a modest recovery generated by a shortage of cows.
The stock level of the milk turns on a yellow light as it also showed a growth of +4.6 per cent year-on-year February 2025, despite the production in a stretch down the curve seasonal —who, as is well known, has its peak in October and declines up to march—. This behavior is explained by two key factors: the still weak domestic consumption and a few exports still could not get traction with enough forcealthough there are signs of improvement. In the thermometer "Stock dairy Industry," it is observed that up to February there is enough milk to meet the internal market and the external. The sensors of the demand (and the interpretation of the information generated as "Sales to the domestic market" for example) is in the Industry.
But there are positive signs in the domestic market. One of the more prominent of the beginning of 2025 was the increase in +18% in the sales of dairy products to the domestic market during the first two months. This upload marks a change of trend in the consumption, which had been stalled, and introduces a glimmer of hope for a chain that you need urgent reactivation before the spring, time in which the greater volume of milk seasonal may exercise a strong downward pressure on the price to the producer if the demand is not accompanied. In the next chart, we look at the growth in the demand for the product where all the products grew in consumption except the Dairy-based desserts and puddings representing the dairy more expensive
New economic scenario: the free market exchange rate, and external opportunities
All of this occurs within the framework of a structural change in the economic policy of the country: the release of the exchange control and the elimination of a variety of dollars “virtual” as the “dollar exporter”. Since April, the exchange rate came to be ruled by the free market, and in his first week showed a rise +6,2%, which improves the incentives to export dairy products. In the following table, we can observe the variations observed between Friday price and the Monday of the “Release”:
In this new context, whole milk powder —main export product of the sector— nearly 4.300 dollars per ton FOB in sales to Brazil, returning to put a value on a business that was hit by low margins and regulatory uncertainty.
The challenge for the rest of the year will be to sustain this incipient recovery in an environment still volatile. The reactivation of domestic consumption, the advantage of external opportunities and the ordering macroeconomic will be the determining factors in 2025 will not only be in numbers as a year of rebound, but as the beginning of a cycle, more virtuous for the dairy argentina.
