27 October 2009 Chilean dairy production is predicted to fall after years of continuous expansion, a US government report said today.
The fall is because prices paid to farmers have dropped significantly in the last year increasing the number of producers going out of business or reducing their production herds, the report added.
Chile’s total milk production rose by 4.1 per cent from 2.45 billion litres in 2007 to 2.45 billion in 2008.
However, an output reduction of about 12 per cent is forecast in 2009. The reduction is due to a fall in international milk prices which, in turn, reduced domestic milk prices .
Furthermore Chile experienced a severe drought that affected the country’s milk production areas.
As a result of these factors, the report said, a number of producers reduced or closed their milking operations.
According to the report industry sources indicated that the number of milking cows sent to slaughter houses increased by 8 per cent in the first 8 months of 2009.