MercoPress. South Atlantic News Agency

Milk shortage in Argentina

The significant drop in Argentine milk production has forced Buenos Aires dairy plants to import fresh milk from Uruguay at a daily rate of 25,000 liters. According to Argentine sources this is the first time in history that the country has been forced to buy milk overseas to honor export contracts of dairy produce

Milk production in Argentina has dropped 15% in the last twelve months, and 29,9% since the first quarter of 2000, indicate official Agriculture Department statistics, while the association of dairy processing plants points out that the industry overall is now in its forty first recessive month.

Low prices in the farm, a drop in domestic consumption because of four years of recession and the floods in Santa Fé province, the most dairy efficient basin in Argentina, have plunged the industry in one of its worse moments.

Argentina's main milk industry processing company SanCor admitted it has an idle capacity of 45% and is now the most aggressive in expanding its business to Uruguay. However in Uruguay, milk processors have warned farmers tempted by the higher Argentine prices that once the situation turns to normal, Argentina will always be "a very powerful competitor".

"One thing is an emergency, given the current Argentine situation, but if local farmers believe they have demand assured in Argentina they are dreaming. Once Argentina stands up they can literally flood Uruguay with milk and in the framework of Mercosur we could be easily tempted by the cheaper fresh milk prices in Santa Fe farms, for example", indicated a member of the main Uruguayan processing consortium, Conaprole.