Drought: they estimate that milk production could drop between 20 and 35% this year

There drought This is the most important and pressing problem of the Argentine countryside, with an impact on each of the activities that make up the sector. Such is the case of the dairy which, due to the lack of rain and the extreme heat, will have a considerably lower volume of food for the animals, causing a collapse of between 20% and 35% in milk production for this year.

This is indicated by a work of a consultant specializing in dairy products, Marcos Snyder, published on the DairyLando blog. If we take into account that in 2022 a total volume of 10,500 million liters was produced, we could say that production losses could amount to between 2,100 and 3,675 million liters, which roughly represents almost all of the country’s exportable supply.

According to Snyder’s work, this collapse in production is totally linked to the shortage of fodder reserves, in particular, the impossibility for a large number of producers to be able to make corn silage. In his analysis, the expert explains that the accumulation of yellow grains “is the most powerful tool available to the milk producer to increase his production”.

“Faced with the need to increase the stocking rate, dairy farms developed on the area planted with corn silage to the detriment of the pasture area. Corn is the crop that produces the most digestible dry matter per hectare and when it is harvested, the use of forage increases from 60% of a pasture to 90% of the silo,” explains Snyder.

Given this importance and considering the impact on corn caused by the lack of rain, in combination with early frosts, Snyder estimated that fodder reserves held by dairy farms could fall by 43%. In other words, of the almost 17 million tonnes of cereals that were available for dairy production, today there are only slightly more than 10 million.

Thus, the specialist spoke of gloomy prospects for the activity. “Things are going to be serious, very serious. It’s unclear how many dairy farms will be able to continue producing as billings will drop in a cost-increasing scenario. In the analyzed series there is a relationship of 0.42 liters of milk per kilogram of silage (with a maximum of 0.55 and a minimum of 0.31), doing the calculation we calculate that in 2023, milk production in Argentina could be between -20 and -35%, much worse than in 2016,” he said.

The only thing that can “cushion” the extent of the collapse is “if it starts raining enough to sow greens and pastures (which will need to be sown more than necessary to lower the load that depended on the silo) and then that the weather continues to be favourable, without a lot of mud or too cold, with good grass production.It is also imperative that the ratio between the relative prices of milk and concentrates normalizes… that a liter of milk can buy two kilos of maize again… and that there is maize to feed the cows!

This extremely critical situation also impacts the dairy industry, in particular SMEs. This is why the Association of Small and Medium Dairy Enterprises (APYMEL) held a meeting to analyze the current situation and request “the urgent intervention of the Nation and the provinces in the face of the extreme situation of the channel”.

“Although production has been affected by the weather in recent years, now the lack of animal feed will become more complex as there will be no reserves for the rest of the year,” APYMEL said. in a statement, saying that “farms in general, but in particular the small and medium ones, urgently need real help from the national government and the provincial governments”.

In view of this, industrialists have stated that “With the continuity of withholding tax regimes, exchange differentials and even contracted international prices, there is no generation of financial differences in the companies included in the chamber that manage to go abroad. An imminent update of the reference values ​​of the products is necessary in order not to continue to pay taxes above the real price of the exported goods”.

Finally, they indicated that “in view of the serious situation raised on all fronts”, the business entity reiterated the hearing requests already made to the Secretary of Agriculture, Juan Jose Bahillo; and the Minister of Economy, Sergio Massa.

Continue reading: