“An excellent year productively.” This is how Jorge Giraudo, Managing Director of the Argentine Dairy Chain Observatory (OCLA), summarizes what the year 2025 was for the Argentine dairy industry. The sector closed at a strong recoverywith about 11.6 billion liters produced and a 10% growth compared to last yearalthough the end of the year was marked by the Decrease in international prices and one Increase in costs which made it particularly difficult for small and medium-sized dairy farms. Looking ahead to 2026, it is expected that production can grow by then 3 and 5%provided that internal consumption improves, external values are restored and more competitive conditions for production are created.
Giraudo explained that production increased by 10% compared to last year, which made it possible to catch up with the decline of 2023 and 2024 and even exceed 2022, with “A total of around 11.6 billion liters of milk“. He also emphasized that the solids “grew by 12% So more than liters.”
Regarding the goal of this production, he pointed out 74% went to the domestic marketwhich came from a decline of almost 10 points in 2024 and managed to recover to almost 7 points, although there is still room for recovery. Meanwhile, the external market started the year with little momentum, but recovered strongly between September and October and closed with a share of almost 26%. However, the end of the year raised alarm again because, as he warned, in the last two months “a Sharp drop in international prices of dairy products.” As an example, he recalled that whole milk powder, the main export product, had become valuable 4000 dollars per ton in May and ended all year round 3300which makes competitiveness more difficult.
Regarding the manufacturer, he indicated that the price was “sufficient” for much of the year because costs were limited, but this ratio began to deteriorate. One of the factors that led to this was the inability to purchase corn, the main input of the activity more than 2.5 kilos with a liter of milk at only 1.7. The OCLA balance sheet shows this with November costs On average, costs exceed priceswhich is left to small and medium-sized dairy farms negative profitabilitywhile the largest still generate slightly positive margins due to their size and efficiency.
In this sense, data published by OCLA shows that profitability deteriorated again in the final part of the year. Last November, the profitability rate fell to -0.3% and the average rate for the last 12 months fell to 2.3%, the organization said. This decline came after a period of relaxation in which prices were “sufficient” because costs were contained: profitability remained at around 4% between March 2024 and April 2025, with a peak of 5.8% in August 2024. However, the increase in corn prices – which allowed the purchase of more than 2.5 kilos per liter of milk to only 1.7 kilos – and the general increase in costs ultimately affected all small and medium-sized dairies Farms.
Looking ahead, Giraudo recalled that we are now entering a period of lower seasonal production, with a low point towards April, and explained that one of the big challenges will be the domestic market. “We need not only an increase in volume, but also an increase in consumer quality, that is, products with greater added value, to generate more revenue for the chain,” he said. In parallel, the industry hopes that global production growth, which has caused prices to fall, will slow and is confident that there could be an international recovery after the first quarter of next year. “We believe that prices will recover somewhat internationally after the first quarter,” held. At the same time, he emphasized the need to accompany this improvement through the exchange rate.
In this sense, the OCLA predicts a possible growth of around 10% by 2026 3 and 5% of production, driven by an “inertia phenomenon” and by dairy farms investing in technology, increasing their herds and improving individual productivity.
“These companies contribute to the strong growth of the industry: When looking at performance by strata, the smallest dairy farms saw virtually no growth in 2025, while the largest grew between 12 and 13% and remained at the forefront of growth,” he noted.
In this context, Giraudo believes that the potential of the sector is high and that expectations for Argentina “is still very cheapHowever, he clarified: “What is important here is to create the comparative advantages that Argentina has.” Conditions of competition“.
In this sense he asked: “reduce the overwhelming tax pressure a littleboth domestically and for export purposes,” and add “greater funding for the integration of technologies and inputs“and ensure that taxes on concrete work actually flow back into the sector.”These taxes do not reach basic infrastructure: roads, electrification, river drainage, “They have to start with that,” he warned, claiming that the goal is for the economy to “drive the micro sector more, create more employment and higher incomes, and that is reflected in the higher consumption sector.”
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