A local problem between Honduran farmers and pasteurizing plants due to the price at which they purchase milk could be the reason behind the block on Nicaraguan dairy products.
Trinchera.com.ni reports that according to the National Federation of Ranchers and Farmers of Honduras (FENAGH), closing the border to milk and dairy products from Nicaragua will continue until there is a resolution to the problem between pasteurizing plants and dairy farmers, who have denounced the low prices paid for the product in plants.
In 2015 Nicaragua led exports of milk and milk products in the region, with $200 million in sales, followed by Costa Rica, which exported $111 million and thirdly Honduras, with $26 million.
Data from for the Milk and Dairy Products Market in Central America, provided by the Business Intelligence unit at CentralAmericaData.com, shows that in 2015 the countries in the region exported 226 thousand tons of milk and dairy products such as cheese and cottage cheese, buttermilk, yogurt, curd and dairy spreads, among others.
The dairy sector in Nicaragua has denounced the imposition of non-tariff barriers by Honduras, whose health authorities have delayed the renewal of certificates for nicaraguan plants.
It has been estimated that 750,000 liters of milk per month have ceased to be exported to Honduras since November 2015, because the National Agricultural Health Service has not renewed certification of dairy plants in Nicaragua. This was stated to Elnuevodiario.com.ni by Alfredo Lacayo, executive director of Centrolac. Lacayo added that this situation is affecting not only the industrial dairy sector but also farmers.
The total amount of exported kilos of milk rose from 76 million in 2013 to 92 million in 2014, with the number one destination being Central America, mainly Guatemala and El Salvador.
Data from the National Chamber of Milk Producers (Caprole) indicates that after Guatemala and El Salvador, the rest of the isthmus is the main market for exports of Costa Rican milk, but the Dominican Republic, Cuba and Venezuela are beginning to have greater preponderance among the markets where milk produced in Costa Rica arrives.
Producers are demanding a halt to imports of the product arguing that industrialists are taking advantage of the low prices of milk powder to use them as a substitute for fresh milk.
In January this year, imports of milk powder reported $3.89 million, while in the same month last year $3.41 billion was recorded. The price per ton showed a decrease of $10, since during 2014 it was trading at $820 and went down to $810 this year, according to statistics from the Center for Exports.
In four years, production increased from 150 million liters to 200 million liters, while annual per capita consumption has increased from 93 to 100 liters from 2012 to date.
Although yet to reach 135 million liters per year recommended by the World Health Organization, preference for consuming milk shows an upward trend among Panamanians, which creates opportunities in the livestock sector which dedicated to dairy products.
Annual consumption per person increased from 182 liters in 2005 to 202 liters in 2013, while domestic production increased 18% between 2009 and last year.
Increased consumption of yogurt, ice cream, cheese, sour cream and flavored milks explains much of the increase in sales of milk products in general in recent years and the increase in national milk production, which rose from 890,000 tonnes in 2009 to 1,055,000 tons in 2013, according to the National Association of Milk Producers.
In twelve years exports to the island have quadrupled, with dairy products, medicines and textiles being the most sold.
From $7.8 million in 2002 to $31.4 million in 2013, Costa Rican products exported to Cuba have grown, answering a growing need by Cubans to purchase basic consumer goods made under local production, such as milk and its derivatives.
The Costa Rican dairy cooperative Dos Pinos has opened in San Carlos a drying plant to make milk powder with capacity to process up to 40,000 liters per hour.
Elfinancierocr.com reports that "the new building, with an area of 4,800 square meters of construction, forms an integral part of the distribution center built on the same property with a value of $5.2 million."
5,932 tons of finished products will be awarded as well as raw materials to supply to the domestic industry during the first six months of 2014.
The auction, organized by the National Commission of Commodity (Conabolpro), will be held on Friday November 29 at the Bolsa Nacional de Productos S.A. (Baisa). Those wishing to participate have until November 21 to register.
The only milk powder plant does not have a lot of processing power, and can not handle all of the supply during peak milk production.
"We believe it is important to try to establish a second processing plant for milk drying in potential areas, in order to process the country's surpluses especially in peak milk production moments," said Willmer Fernandez, president of the Central American Federation of the Dairy Sector (FECALAC).