The Argentine dairy sector is experiencing a complex situation where, despite producing more than a year ago, there is a notable decline in farm revenue. In January 2026, the average income from milk production fell by 9.9% in constant pesos and 14.1% when measured in dollars. This decline coincided with adverse purchasing power for producers, who are increasingly reliant on foreign markets due to the growing supply in the domestic market. The current dynamics are causing concern as farmers struggle to maintain profitability even with rising international prices.

Recent data from the Observatorio de la Cadena Láctea Argentina indicates a significant 18.7% drop in the average price received by producers compared to January 2025. Coupled with this, the economic conditions are altering the vital input-output relationships in dairy production. For instance, the ratio of the price of milk to that of maize has worsened, meaning that producers are finding it increasingly challenging to cover their costs and sustain their operations without venturing into export markets. This ongoing shift highlights vulnerabilities within the industry that may necessitate policy adaptations or industry interventions.

The unfolding events in the Argentine dairy sector reflect broader market trends influenced by both international recovery and local economic pressures. While there is optimism surrounding potential export opportunities as global prices improve, the structural issues within farm revenue and input costs need to be addressed for the industry to thrive sustainably. This situation may require stakeholders to enforce measures to support local producers while navigating fluctuations in the global dairy market.