BUENOS AIRES, March 24 (UPI) -- Argentina, one of South America's leading milk producers, is facing a deep crisis in its dairy sector, with plant closures, underused capacity and a market strained by delayed payments and layoffs.
Despite the woes, national milk production last year reached 11.6 billion liters, the highest level in a decade and the second-highest on record. Output grew 9.7% from the previous year, according to the National Dairy Directorate, a government agency that compiles industry statistics.
The contrast highlights a structural problem. Despite record production, many companies are not profitable. Rising input and energy costs, limited access to financing and shrinking margins have particularly affected mid-sized and regional firms.
"The central issue is the lack of profitability," Luciano Di Tella, director of dairy company Yatasto and a member of the Association of Small and Medium Dairy Enterprises, told UPI.
"It is a serious problem both at the farm level and in the industrial sector. That lack of profitability is the result of several factors. One of them is declining consumption," he said.
