Milk is 36% more expensive than a year ago: dairy workers do not rule out supply problems

A liter of milk today, March 11, 2023, costs around $5,900. In March 2022, it was $3,800, more or less. The explanation for the 2,000 dollars per liter of milk, according to experts, has three faces: the impact on agriculture of the La Niña phenomenon, the high costs of inputs and the scarcity of grass. Added to this price increase is the fact that milk is beginning to become scarce. This is how the milkmen warn.

The National Administrative Department of Statistics (DANE) recently revealed that in February 2023, the annual change in the Consumer Price Index (CPI) for milk was 34.55%, the highest since January 2016. At the Ministry of Agriculture, the price of milk, for consumers, increased by 36.6%, while for producers, the increase was 38.6% in 2022 compared to 2021.

Felipe Pinilla de Brigard, president of the National Association of Milk Producers (Analac), points to three reasons for the rise in milk prices in recent months. The first is the increase in production costs, which, he points out, “continued to increase in 2022, progressing between 17% and 39%”. These cost overruns, says Pinilla, are linked to “the increase in concentrates or balanced feeds”, because, he warns, many of these products are imported, so with exchange rate volatility and high prices to those that the dollar has reached have also affected the final price of milk.

The second reason Pinilla finds for rising milk prices stems from the first, as he warns of high fertilizer prices to produce pasture, “the main source of food for cows.” The third and last reason, for the president of Analac, is related to the fact that “we had a La Niña phenomenon of almost three years which limited the production capacity of each farm and there were no longer so many food as he could before winter,” he said.

According to DANE, over the past two years, the country’s milk production has fallen by more than 8%. With the high costs to which they are subject today, when a liter of milk costs around $6,000, supply problems cannot be ruled out.

Oscar Cubilloshead of economic studies at the Colombian Federation of Cattle Breeders (Fedegan), sees in the decline in milk production in the country the reason for the rise in prices, since he asserts that in the country “there is less milk”.

According to Bancolombia’s economic research group, milk consumption per capita has been falling in recent years, from 158 liters in 2019 to 141 liters in 2021, a trend that will continue in 2023, they warn in a report published on March 6.