The Resurgence of South America’s Agricultural Industry

South America maintains a vibrant dairy manufacturing industry full of economic expansion. Although 2016 had been a challenging year for too many shareholders all through the dairy district, 2017 has also been a year of economic recovery and improved performance. While some main issues remain to be fixed, the total food industry’s mood is more optimistic than the year before.

Perhaps one possible way of perceiving this optimism is through higher milk production and distribution. After nine straight months of an all-around downturn, milk production is increasing progressively in South America as of late. Brazilian dairy inventories have been four per cent higher through the first six months of the year, whereas improvements in regions like Chile and Uruguay have also been considerably noticeable. Even in Argentina, the area that endured the worst in 2016, dairy cultivation is slowly moving up to par, compared with the previous year’s outputs.

The central element behind the increased milk output is the better overall environment. Although severe drought overwhelmed some of the other South American farming districts the year before, heavy downpours plunged others into turmoil. In general, the climate last year, was far more favourable throughout the entire region, with sensible rainfall and mid-range humidity. Climate projections, however, show some likelihood of a storm trying to develop over the coming weeks, which won’t be too severe, but it might lead to some unusually dry spring and summer months.

Besides fairer weather, the agricultural economy has also got better compared to the year before. Dairy prices have increased gradually in almost all parts of the country, especially regions attempting to compare with current rates. All except Brazil, whose agricultural prices toned down the year before, but are still the highest in the country. The production costs have also decreased as the climate stabilised, ultimately resulting in a record-breaking grain crop that credits production costs. Moreover, as financial situations improve, there are minimal price rises and reduced economic pressures.