Challenges Faced by the Colombian Dairy Sector: Price Drops Threaten Production – Solutions Proposed

Challenges Faced by the Colombian Dairy Sector: Price Drops Threaten Production – Solutions Proposed

2024-03-12 02:00:11

The Colombian dairy sector has been facing great challenges due to the consecutive drop in the price paid to the producer per liter, a fact that threatens dairy production in the country.

The president of Fedegán, José Feliz Lafaurie, denounced that there are several structural dysfunctions that are affecting the region, such as high production with an average of 7,414 million liters, a low formal collection with 44% of the milk produced (3,283 liters), few buyers (five companies), growing imports, dysfunctional distribution of consumption and smallholdings as the prevalent mode of production.

With the challenges on the table, Lafaurie told the Minister of Agriculture, Jhenifer Mojica, that the sector is in an ‘SOS’, because during 2023 and so far this year, milk consumption has shown a drop of 9% as a reaction to high consumer prices, and also, the one that he considers most decisive, which is the 11% drop in livestock value with payments of up to $1,200 per liter.

(Read: Milestone for the Colombian poultry sector: the country exports eggs to Cuba for the first time).

It is worth detailing that in a letter to the Minister of Agriculture, the president of Fedegán expressed that “the recurrent crises in this sector are related to each other and have become a ‘structural crisis’, the main dysfunctions of which, although already mentioned, In my communication on January 5, I return on this occasion as a context of the difficult situation that dairy production is going through today.”

Now, in consultation with Felipe Pinilla, president of the National Association of Milk Producers (Analac), he assured Portafolio that there is an alert regarding the price of milk paid to the producer, since it has been in production for a total of 11 months. decrease for each liter sold.

Leche

Private File

“The prices of dairy products at the plant and to the consumer still do not react coherently. This is what has not allowed consumption to rebound. It might have rebounded from the second half of last year if that had happened,” he explained.

Likewise, the union leader added that this whole situation adds another concern, because in addition to the complex moment that the sector is going through, summer increases production costs, which “strongly puts pressure on the income and profitability of the dairy producer.”

“At the end of the quarter we will have a lower production that makes the situation challenging, but the supply of dairy products to the consumer will remain stable,” said Pinilla.

(You can read: Insecurity and strikes affected the productivity of banana growers).

Along the same lines, José Félix Lafaurie added that this situation is aggravated for small producers, since the decrease in income from the sale of a liter of milk does not correspond to a decrease in the cost of inputs to produce it, which requires of more measures and costs to preserve the health of the animal and its minimum production capacity.

“As an example, in the dairy and smallholder area of ​​the Cundiboyacense highlands, a package of corn silage (50 kilos) placed on the farm exceeds $20,000, which puts the farmer facing extreme options: losing his animals and his source of income. income, or choose between feeding them or poorly feeding him and his family,” he explained.

milk production

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In the “urgency” letter sent by the president of Fedegán to Minister Mojica, Lafaurie presented a couple of proposals and reflections regarding the situation that the country’s dairy sector is going through.

Firstly, the creation of a fund that promotes the consumption of milk and dairy products in children from popular sectors is proposed, financed between Fedegán and the industry with 50% and the remaining percentage to be assumed by territorial entities or the Government.

(You can read: Fedegán asks the Government for help due to the situation of milk producers).

“The current scenario of high production, high inventories and low consumption is an opportunity to implement it,” he says.

Also, the obligation to include milk in public purchases for programs such as the PAE, community kitchens and rations for the Public Force is raised.

Leche

Private File

“There is also the holding of regional fairs and business conferences in conjunction with the ministries of Agriculture, Commerce, governorates and mayors to promote the popular economy based on local products, reducing intermediation,” wrote Lafaurie.

And he added the promotion of effective campaigns to promote consumption, with a cheese or milk week, which stimulate demand. “If there is a hamburger week, why not a cheese week?” concluded the president of Fedegán.

DIANA K. RORDIGUEZ T.
Portfolio Journalist

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