Argentina is no longer the No1 provider of Milk Products to Chile – New Zealand is ?
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New Zealand has replaced Argentina as the main milk product exporter to Chile.
In what seemed like a routine report of the Office of Agricultural Studies and Policies (PASO) under the Ministry of Agriculture of Chile, revealed a surprising reality: Argentina ceased to be the main supplier of dairy products to Chile, replaced by the tiny island of New Zealand.
Incredible news given that New Zealand has some of the highest prices dairy land in the world and pays its dairy farm workers amongst the highest salaries in the world. So high in fact that in the past many farm workers were able to buy their own farms.
Having lost this market next door, Argentine producers are left with older markets, such as Brazil and Venezuela which pay more. “Currently, Argentina is experiencing some difficulties in competing in Chile and the market has been taken by New Zealand, at slightly lower prices,” said the director of PASO. The New Zealanders can produce milk at a fraction of the price of many South American countries. South American dairy farmers struggle to compete due to outdated technology, poor cow genetics, poor work practices and extreme government interference, in particular the Kirchners government in Argentina.
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Whoever takes over next year to run Argentina will have some challenges ahead. The major one getting confidence back into the country by investors local and foreign, They will only do this by improving the rule of law and the strength of the institutions plus opening up the market to more competition. Currently only a few elite are benefiting. Fortunately looking at some of the potential candidates this might happen.