The Mesa de Productores Lecheros Santafesinos MeProLSaFe knew in the first edition of the programme Dólar Soja that the government’s mistakes and the historic drought would make the crisis in the sector even worse.
The government’s work on macroeconomics has delayed investment decisions and caused a pullback in the sector, but milk won’t stop flowing because what we’re seeing is a concentration of production, not a decrease.
Yes, the drought will slow down production next year because some reserves will arrive later because of the delay in planting corn. This will affect both confined and pastoral dairy farms, but the market will eventually be able to handle them.
There is worry because if the smaller dairy farms went away, production would go down, and there would be less milk and all of its products on store shelves. But there won’t be a shortage of milk because the farms won’t go away. Instead, they will be taken over by bigger farms. There will be less milk coming from the same number of larger farms.
The way things are made today requires a larger scale, which means that some producers will have to leave the business as they have been building it, while others will grow. But dairy farming won’t go away. Instead, it will have to change with the times.
The government needs reserves to be able to pay its international debts, so it is putting measures on the producers’ backs that don’t take into account the damage they do.
The Dolar Soja programme, which gives money to grain exporters, large agricultural producers, and landowners, fully reaches small producers, takes them out of the game, and shakes up all activities that depend on grains and that rent the land they work on.
MeProLSaFe predicts that the combination of the weather and politics will cause a sharp drop in dairy production in the next few months. This will lead to a lack of processed products and the loss of a lot of dairy farms and dairy producers. But there is nothing new under the sun when it comes to politics… The drought will be the most noticeable.
The group not only predicts hard times, but also suggests ways to avoid them and find a balance between the government’s needs and those of the producers. For example, the government should help the smallest producers by compensating the price of raw milk at the farm gate, offering financing with low rates and long terms, and changing the cost structure.
They say that if these alternatives aren’t used or are thought about at the wrong time, very few dairy farms will survive the economic imbalance and the extreme drought, and there will be a shortage of processed products next year. Prices will go through the roof, which will raise the cost of the basic food basket and make inflation worse.
All of this was already talked about in September, when the desperate Dolar Soja measure was new and promised to be one-of-a-kind and never done again. They made suggestions that are still in effect. The answers that were promised are still not here.
It’s good to eat dairy products, but making them is getting harder and requires producers to change the way they think and the infrastructure they use. Even though milk will keep coming, macroeconomic policies are forcing dairy farmers to change how they run their businesses.
