The entry of milk from Nicaragua and Honduras has complicated the situation for Salvadoran producers, who are claiming that they are losing 40% of their daily production due to the presence of the imported product.
The Livestock Association of El Salvador (AGES) is complaining that an increase in the presence of imported milk from neighboring countries has depressed prices, making it difficult for them to sell their product.
A report by the SIECA shows the composition and characteristics of the production and export of dairy products in Central American countries.
From the report "Analysis of the Central American dairy market and its derivatives", by the SIECA:
Dairy products constitute a wide range of goods that are important for human consumption, and contribute to the development of local economic activities linked to extraction, processing, industrialization and commercialization.The Food and Agriculture Organization of the United Nations estimates that about 150 million households are engaged in milk production and more than 6 billion people are consumers of milk and milk products.
The Mexican company Lala will be building a milk, ice cream and by-products factory in Guatemala, with capacity to process 5 thousand tons of products per month, and it will start operating in the first quarter of 2018.
The 12 thousand square meter production plant will be built in Escuintla and will have a production line of pasteurized milk, ultrapasteurized (UHT) milk and ice cream. Grupo Lala announced that once it is in operation it expects to begin working with 1,500 Guatemalan producers to supply milk.
Suppliers of agroindustrial machinery and equipment are visiting the country in order to explore commercial opportunities with Nicaraguan milk producers.
The Argentine companies that are currently in the country are part of the Argentine Chamber of Manufacturers and Suppliers of Equipments, Supplies and Services for the Milk Chain (Cafypel) and are offering milking equipment, pasteurizers, milk refrigeration equipment, heat exchangers, milk processing equipment and water treatment equipment.Together with the National Institute of Agricultural Technology (INTA) they will be giving technical talks to Nicaraguan producers.
Projections for 2017-2018 are to plant an area of 1.7 million manzanas (a unit equivalent to 1.72 acres), in the cattle sector 865 thousand head of cattle are expected to be slaughtered and, in the dairy industry the expected projections are of 280 million gallons.
The Plan for Production, Consumption and Trade in the 2017-2018 Cycle includes details of the Nicaraguan government's projections for agricultural, livestock, poultry, aquaculture and forestry sectors for the current year and the next.
In 2016, the value of trade in milk and milk products among the countries in the region amounted to $299 million, 4% more than that was sold in 2015.
Figures from the information system on the Central American Market for Milk and Dairy Products, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption="Clic para interactuar con la gráfica"]
The Mexican company Lala plans to invest $14 million in the expansion of its plant in Alajuela and to start selling milk and ice cream in the Costa Rican market, starting from 2018.
The investments being made in Central America by companies in the dairy industry reflect the growth potential of this business in the region, where per capita consumption of milk and dairy products has been growing during the last years.
The union estimates it will manage to export $200 million, after closing 2016 with $172 million due to health conflicts that led to the temporary closure of neighboring markets such as Costa Rica.
The difficulties faced by the dairy industry in Nicaragua in mid-2016 with theconflict over trade in dairy products with Costa Rica, and the temporary closure of the market in Honduras affected the overall performance of the sector, whose exports did not exceed the $200 million that had been achieved in previous years.
Milk and meat producers have reported discrepancies between the prices paid by slaughterhouses and international market prices.
The Federation of Livestock in Nicaragua (Faganic), the National Union of Agricultural Producers in Nicaragua (UPANIC), and the Nicaraguan Chamber of the Milk Sector (CANISLAC) have reported that four slaughterhouses are distorting the local market by allegedly paying prices that are lower than international prices.
Formalizing the sector and improving the implementation of sanitary measures would make it possible to exploit the export potential and take advantage of growing international demand.
It has been reported that there are 37 cheese processing plants certified by the Institute of Animal and Plant Health Protection (IPSA), 36 of which make cheese for export.Figures from the Business Intelligence unit at CentralAmericaData com indicate thatin 2015 Nicaragua led the export of milk and milk productsin the region, with $200 million worth of products sold.The country's dairy export potential can be better exploited in order to improve sales of cheese abroad.
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.
It is estimated that "the worst of the crisis" in international milk prices could be ending this year, with better levels starting to be established in 2017.
In an event held in Managua, experts from the Pan American Dairy Federation (FEPALE), explained the trend seen in the international price of milk and the effect it has had on exports from countries such as Nicaragua, which ranks as the fourth largest exporter of milk and dairy products in Latin America.
The dairy products that the Mexican company is to sell in Nicaragua under the brand Lala will be made at the plant in San Benito, in Tipitapa, department of Managua.
The dairy products under the brand Lala which will start to be sold in Nicaragua are whole milk, lowfat, light, low fat, lactose-free and lactose-free Light.
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.
Complaints are being made over the sampling process used to verify product quality which is causing delays, forcing goods to be kept at the border for up to 15 days.
The union of the dairy sector in Nicaragua says that the waiting time for the results of the quality test is not supposed to be more than 8 days, but when samples are sent which were taken from El Amatillo to San Salvador, the process is much longer.
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