November 29, 2011


Argentina to lead increase in dairy output



Argentina is expected to come ahead of dairy exporters in another round of rising global milk production next year amid good weather and high profitability.


This trend is expected to drive competition for import orders primarily from China.

Next year, the South American country's dairy sector is to continue its recovery from the 2009 to 2010 drought, when 30% of calves died, with farmers attracted by profitability better than that obtained by many arable growers.


"Current returns on soybeans are significantly lower compared to dairy," USDA staff in Buenos Aires said.


"Milk production is forecast to increase further," albeit by 3.8%, behind the 13.1% growth seen this year, which witnessed the bulk of the sector's recovery.


Nonetheless, at 12.45million tonnes, 2012 milk output will hit a record high, up by nearly one-half in a decade.


And, with domestic consumption already high, at 210litres per capita, much will be surplus to Argentina's own requirements, and "be processed into whole milk powder, which will then be exported", the USDA attaches said in a report.


"Total exports of dairy products are expected to increase significantly in response the anticipated increase in milk production."


Whole milk powder shipments will rise 12.6% to a record 250,000 tonnes, much to other South American countries, but also to the Asian countries which are a battleground for many dairy exporters.


"According to contracts, Argentina's exporting efforts are now geared also towards increasing exports to China and the Asian countries," the briefing said.


The comments follow a round of data showing buoyant recent production in major exporting nations, including the US, where output rose 2.1% last month, from October 2010, boosted by nearly 100,000 extra cows in milk, and a 17-pounds-per-cow rise in productivity.

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