Argentina Compound Feed Market Trends

Market Trends of Argentina Compound Feed Industry

Poultry Feed is Witnessing Higher Growth

• Argentina's ongoing issues of sluggish growth and elevated inflation have diminished purchasing power for large segments of the population, resulting in reduced consumption of costly meats. However, the poultry feed sector is witnessing significant expansion as domestic poultry meat consumption increases, driven by its competitive pricing compared to other meats. Consumers are increasingly turning to poultry as a more affordable protein option in response to economic pressures.
• In February 2023, Argentina's poultry industry encountered a significant setback due to an avian flu outbreak, resulting in a decline in poultry exports. The sector responded promptly by implementing rigorous biosecurity measures at the farm level. These efforts proved effective, as farms successfully declared themselves avian flu-free by August 2023, a status acknowledged by the World Organization for Animal Health (WOAH). Subsequently, poultry meat exports have experienced a substantial increase. The USDA estimates that poultry exports will likely rise by 18%, reaching 170 thousand metric tons in 2024, which is expected to drive growth in the poultry feed market.
• Since August 2024, the Argentine government has reduced the export tax on all poultry products and beef, setting the rate for poultry at 6.75%, down from the previous 9%. This measure is part of a broader initiative to deregulate the local economy by lowering tariffs on agricultural inputs and opening international markets, thereby stimulating poultry production. This policy change is expected to positively impact the poultry feed market in the country.

Ruminant Feed Dominates the Market

• According to the Food and Agriculture Organization, the dairy cattle stock in the country exceeds 1.56 million. The distribution of milk production is concentrated, with approximately 5 percent of dairy farms accounting for 24 percent of the country's dairy cows. The presence of large farms also indicates a higher use of compound feed in maintaining herd populations and well-being.
• Argentina dairy farmers heavily rely on domestically produced inputs, including feed and other supplies. Weather effects and supply chain disruptions have increased feed prices, intensifying financial pressure on farmers. This has compelled many to reduce production or seek additional capital, with some operating at a loss, thereby slowing the consumption of ruminant feed in the country. Consequently, milk production in Argentina has declined significantly in 2023 and 2024. According to the Ministry of Agriculture of Argentina, milk production totaled 11.3 million tons in 2023, and this figure is forecast to fall 7% as production from January 2024 to September 2024 has witnessed a 9.5% decline. As a result, ruminant feed, although dominating the segment among other animal types, is likely to experience slow growth until the country's dairy sector recovers.
• The Argentina Government has implemented various measures to support the dairy industry amid challenges. In December 2023, it reopened agricultural export registrations to increase exports and generate foreign currency revenue. Farmgate milk prices have increased by over 45% since the beginning of the year, and producer margins have improved, with profitability reaching 4.3% or higher. These developments indicate a potential recovery for Argentina's dairy industry despite initial economic challenges.