The dairy is wrapping up an “excellent” 2025 in terms of production, but with several dark clouds in the business

He Dairy sector is preparing to end a productive year “excellent”in which it was not only possible to make up all the lost ground in 2024, but a Growth process in the amount obtained from milk, from hand unbeatable climatic conditions in most pools and a Price paid to producers This accompanied many months of 2025, was above inflation and resulted in positive profitability on most dairy farms.

According to the latest data from the Argentine Dairy Chain Observatory (OCLA), production increased 10.2% year-on-year and 10.5% on a daily average, thus reaching the 10,572 million liters.

Although this increase, which peaked at more than 15% in the first half of the year, is due to a very low comparison base, since the year 2024 was disastrous for the sector, the truth is that, from a purely productive point of view, The recovery was complete.

“For production in 2025 to recover the declines of 2023 (-2.0%) and 2024 (-6.5%), it would have to increase by 9.1% this year compared to 2024, a figure that does not was achieved without any problems in these eleven monthswith which the production of 2025 would exceed that of 2022 and, with the exception of that of 2015, would be the highest in the historical series, reaching around 50% 11.6 billion liters of milk“ says the OCLA report.

Therefore, the Executive Director of the Observatory, Jorge Giraudoassured that “2025 will end like a year.” productively excellentwhere the climatic conditions were very favorable for pasture growth, the creation of reserves and animal protection.”

In addition, “for much of the year The price ratios were excellent“, between the price of milk and, in principle, also of foodstuffs such as corn and soy cake.”

“We will finish a year with 10% more liters of milk and 12% more milk solids, which would be an increase per year practically record in productionwith the exception of 2015, which was a special year because the way statistics were compiled there changed and it is doubtful, let’s say, whether it is the highest year. But in terms of milk solids, it will be the most important year,” said Giraudo.

For the Coordinator of the Dairy Commission of Argentine Rural Confederations (CRA), Norberto Ferrariwho takes a critical stance towards the actions of the industry and understands that this must be the case in Argentina change the marketing system and to concentrate fully on exports, the year started with good expectations, but these were diluted in the second half of the year.

“We started 2025 positively and fell. Now that we see the inflation numbers, the increase in costs and the increase in our milk price, We finished the year badly“Ferrari summarized.

Although he claimed that it was not “terrible” like previous years, especially in 2024, “the truth is.” We end up getting a lot of warningswhich range from yellow to orange.”

“At CRA, we fight to support each of our producersbecause if the global view of dairy farming in all its contexts does not change, we will not be able to achieve it and producers will continue to decline. We need to improve the trading system and ensure predictability.”

What Ferrari mentions is this Concentration process Loss of activity and the closure of smaller dairy farms.

For example, according to OCLA, the productive units that produce daily up to 2,000 liters Today they represent almost that 45% of dairy farms and only 13% of production, while those who produce Today, more than 10,000 liters is 8%, which is 37% of the milk produced.

This implies a major change in the production structure, as small dairy farms accounted for 60% of the production units 2010which supplied 27% of the milk, while the largest only accounted for 1%, i.e. 5% of production.

Additionally, About 200 units were lost in all of 2025 productive – mostly small – increased from 9,129 to 8,929 today.

“Argentine dairy farming is very strongly consolidated at the primary level into productive structures of considerable size.. That is, the processes of closed cow automation, robotization and more are being introduced with great force and we believe that this is an unstoppable phenomenon that will continue,” said Giraudo.

As for them Own consumptionwhich normally accounts for between 70% and 75% of production, and the export2025 was a year of partial recovery in the first case and a year of growth in the second case, although with some deterioration in business from the second half of the year due to the fall in prices.

On the domestic market side, the sector’s goal was to leave 2024 behind consumption decreases which in some months amounted to more than 15%.

“In 2025, that decline will be 10% in 2024 They gained about 7 pointsSo we are not at the 2023 consumption level, but we are very close. Expressed in numbers: In 2023 we will consume 190 liters per inhabitant per year; in 2024 171 liters; and now in 2025 we will use 183 liters. There is still something to improve, but that will certainly happen,” explained Giraudo.

On the side of exportAccording to the latest data, 337,479 tons were shipped between January and October for $1,353 million, representing 8.7% growth in volume and 19% growth in value.

However, this business took a turn for the worse: “The bad thing at the moment is this International milk prices have fallen sharply due to global oversupplyto the point that milk powder was worth $4,300 in May this year and is now at $3,200, a decline of more than 20%.”

“This will certainly impact the rest of the year and particularly the start of next year.”. “We hope that global production will begin to shrink, that demand will counteract this and that prices will improve somewhat,” Giraudo concluded.

In the case of SME dairy industryThe situation worsened over the months, going from a fairly good first semester to a second in which business began to deteriorate.

As the President of the Association of Small and Medium Dairy Enterprises (Apymel) explained, Pablo Villanoexplained that the peak of milk production, which occurred in the spring months, “we found it a bit complicatedbecause the internal market was not enough to sell what was produced and (the industry) began to store so much dough for mozzarella, cheese, milk powder… All large, medium and small factories began to be filled with supplies.

“That meant there was a lot of supply on the market and that meant….” Falling prices in the industry“Production costs continued to rise and of course the SMEs became more and more complicated because they continued to have to pay for the milk and it did not correspond to the end consumer prices,” said Villano.

So claimed the president of Apymel, as was the case with primary production “The complicated final year”However, he maintained positive expectations for next year: “The wishes are that the domestic market will be restored and there will be more purchasing power,” and that “a lot will be sold abroad and the entire chain will be profitable.”