Argentina milk production forecast to decline 3% - USDA-FAS
Severe drought has limited forage
7 August 2023
1 minute read
By: Argentina milk production is forecast to decline 3% as severe drought has resulted in poor forage conditions and expensive, poor-quality hay, according to a recent US Department of Agriculture Foreign Agricultural Service (USDA-FAS) report.
In addition, significant peso depreciation2 continues to hover over dairy production. In the past, strong depreciation in the peso has corresponded with declines in milk production because most inputs, mainly concentrates, are dollar denominated, and their prices are set by the open market. Meanwhile, the price of milk, of which nearly 80 percent is destined for domestic use, can take several months to adjust to the new dollar value and compress margins in the near term for producers.
