The current situation in the country has put the milk sector in the spotlight. Months ago, the supply in some areas of Colombia could have been affected by the strong increase in the voluntary bonuses that the industry has been paying, the drop in inventories and a 37% increase in the volume of imports of milk and dairy products.
(See: Parmalat denies allegation of adulteration of milk with whey).
This was revealed by the investigation by Grupo Bancolombia, who in their report ‘The recovery knocks on the door of the dairy sector’, evidenced the attractions and effects of the current situation for the milk sector in the country. According to the report, before the higher price, farmers respond with a greater supply of storage, where it is stated “this year it recovers with a growth of almost 8% as of May.”
Ranchers have been encouraged to invest in fertilization and comply with feeding programs and, on the other hand, there is a greater incentive to sell to the formal industry given the rapid price increase (48% in May).
According to the report, the formal collection of milk, for 2019 in the sector produced 3,170 million liters, a figure that for 2020 increased by 5.6%, reaching 3,347 million liters.
(See: These are the milk producers that the SIC investigates).
However, by 2021, a reduction of 7.0% was evidenced, with a production of 3,113 million liters.
So far in 2022 (January-May) the collection of milk is at 1,404 million liters, presenting a variation of 7.7%.
(See: Climate, inflation and war drive the price of milk in Colombia).
For his part, Felipe Pinilla, president of Analac, assures that: “We have spent almost two years with high input costs, fertilizers for pastures (…), they have tripled their price. We also use corn and soybeans, which are the inputs for the concentrates of the cows, making the product more expensive and affecting it,” added Pinilla. In the affectations are the production costs. According to Pinilla, “by 2021, it cost the producer 15% more to produce and so far in 2022, against that closing of 2021, the result was 24% more that costs have grown, if we add what was in 2021 with what By 2022, costs have increased by almost 45%”.
(See: Formula milk: keys to understanding the shortage crisis).
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