Dairy production is one of the pillars of the province of Santa Fe, both in terms of the primary link of the chain (dairy farmers), as well as the production of industrial products (mainly cheeses and powdered milk).

A look at the productive map of the province of Santa Fe published by the Observatory allows them to be located mainly in the central-west of the province.

It is for this reason that the situation of the sector is of special importance for the economy of the province, which leads to concern about the strong crisis that producers are going through, especially primary ones.

It turns out that since the end of last year, the average price received by dairy farmers per liter of milk produced has fallen by almost 17%, going from $3,23 in December to $2,69 in August.

At the end of this article you will find the download button for the full report.

But the delicate financial situation of the dairy farmers is not an exclusive product of the drop in prices this year, but since the beginning of 2011 a stagnation of prices in dollars has been observed, even at times when international dairy prices were - on average - high.

Taken together, with the real appreciation of the peso resulting from inflation that has been higher than the variation in the exchange rate, the result has been a loss of profitability, even forcing the closure of numerous dairy farms in the province.

Various causes explain the current situation of the sector. External factors such as the fall in commodity prices have a preponderant importance, leading to a crisis that exceeds the country's borders and also hits producers in the rest of Latin America, especially Uruguay, hard.

However, at the local level this has been accentuated by a sectoral structure that harms the most fragmented producers and negatively affects the dairy industry, as well as the rest of the agro-export sectors.

In this article we provide a review of the main problems facing the dairy chain in the province. It characterizes the international situation of the dairy sector, and then goes deeper into the local functioning of the sector.

Likewise, in order to delve deeper into the particular causes of the Argentine economy, a comparison is presented between the domestic functioning of the sector with its Uruguayan equivalent.

We invite you to read our report, and of course, to discuss the causes that currently shape a sector in which primary producers have been the most affected; highlighting a serious problem for the economy of the province of Santa Fe , where both primary producers and dairy companies that choose to locate their industrial plants near the place where the raw material is produced coexist.