Buenos Aires, June 13th. As Argentinean dairy farmers see how the corn and energy prices, taxes and dollar rise day after day, and milk prices continue stagnated their nuisance is also raising.
Last Monday, June 11th, the powerful Rural Confederation from Buenos Aires and La Pampa Provinces (CARBAP) warned that Government is no giving successful answer to dairy farmers claims. Farmers argue that they are losing AR$1 per liter of milk delivered to the industry. During April, the average milk price for the farmers rounded AR$6,20 (US$0,30 at April currency exchange) while costs production rounded AR$7,20 (US$0,36).
But since May 2nd, the dollar climbed from AR$20,54 to AR$26 on June 11th, i.e. a 26% currency depreciation in only 40 days. “While our costs are paid in dollars, our product is sold in pesos”, laments Andrea Passerini, a dairy farmer at Carlos Casares (Buenos Aires Province) and dairy referent from CARBAP in dialogue with www.eFarmNewsAr.com.
Due to de currency devaluation, corn prices at the local market climbed from AR$3.770 (per tonne) at May 2nd, to AR$4.076 at June 11th, after peaked AR$4.400 in late May. But as corn prices rise, energy costs also climb. Some farmers are paying the equivalent of 5,000 liters of milk to pay de electricity bill. “Moreover, last year I had to use two times the volume of diesel that I used in 2016, to move the electric generator, due to the cuts in the supply”, explains Ms. Passerini.
In Argentina, the dairy economy is sunken in a deep crisis. In 2016, the milk production plunged 15% respect to 2015. But during 2017 not only the production could not recovery but declined 1% more. Exports also declined from 330.000 tons in 2015 to 225.000 in 2017. Local consumption is also falling as Government is setting a structural adjustment program.
“We know that many dairy farms are closing due to the crisis, but there is no official statistics about it”, says Passerini. “We are asking our rural associations to inform how many dairy farms were closed in its county”, adds.
Rural leaders are disappointed with the passive attitude of National and Province Governments. “They say that they understand our claims, but they do nothing”, remarks Ms. Passerini.
Dairy farmers associations are considering to run protest all over the country to provoke Government reaction. In this case, it will be the first clash between Macri’s Administration and farmers.