We all remember an special show by the great Tato Bores when, playing Helmut Von Strasse, an “Argentinologo”, tried to explain the disappearance of a country that once was called Argentina.
For those who have not seen it, watch: https://www.youtube.com/watch?v=zg68WDK2YsA
That country still exists, but just as reality often is stranger than fiction, some of its historic features are on the way to disappearing.
A report made by the European Commission written by Directorate-General of Agriculture and Rural Development and the Joint Research Centre of the Institute for Prospective Technology, predicts that if Argentina continues this way, it will disappear in the rankings of exporters of dairy products in the next 10 years.
This report presents the medium – term outlook for key agricultural markets for 2024, based on a consistent set of macroeconomic assumptions considered most plausible at the time of the analysis. These projections also assume a continuation of current agricultural and trade policies, and that is the point of greatest concern.
Today Argentina is among the four largest exporters that made the most impact in the last 10 years together with New Zealand, the United States and the European Union. The forecast for the next 10 years implies it will be out of the graph.
The most painful thing is that the projections are part of a favorable international outlook for the sector’s growth, with an increase of dairy products consumption estimated above 2% annually for the next decade.
Significant growth in the consumption of dairy products in India, China, Middle East, other countries of Asia and Africa is expected. This increase is only due in part to population growth, with rates of population growth now slowing in these countries. The main driver is a change in consumption patterns towards a diet with a higher intake of milk proteins, a development that is directly related to the increase in the number of households in urban middle class.
These numbers represent an evolution of world market growth similar to that seen in the last decade, with China as the main reason of this increase, but reducing their percentage share.
But the saddest part of these projections is that except New Zealand where any increase in milk production goes to the world market, other major exporters as the EU and the United States with increased domestic consumption will absorb part of the growth. Argentina has the possibility of living similar to New Zealand allocating any future increased production to the world market, because of its production policies that opportunity would be lost.
New Zealand is expected to remain the largest exporter of milk, which represents about a third of world exports, but the EU will be a close follower, and will strengthen its position in the global market. Meanwhile, the place occupied by Argentina in the last decade will be occupied by the US.
The big question that arises from this report is whether there is still time to change the course or we are inevitably going to a new lost decade.
By Damian Morais to Lechería Latina