Latin America update: Production growth slows

Production volumes compound on last year’s growth

Quarterra reported that year-to-date (Jan–April 2026) production volumes in Latin America were at 5.4% growth compared to the previous year, driven by strong margins and favourable weather conditions. The most recent commentary for April expects Latin America to remain positive for most countries, but an end to the extremes may be on the horizon.

Globally, milk deliveries have continued to see strong year-on-year growth from Jan 2025. April total saw an increase of 4.8% compared to the same period in the previous year. Latin America has made a significant contribution.

Quarterra data shows production by country up to April 2026. Argentina, Uruguay, and Chile have been responsible for much of the growth, as seen in Figure 1. However, data is limited for some countries in specific months, Brazil data in particular.

Figure 1. Year-on-year percentage change in Latin America milk production

Source: Quarterra

*Figure 1 shows year-on-year percentage change in Latin America milk production for November 2025 to April 2026, monthly.

Bars show by contribution by individual country and line shows Latin American Index.

Some producer headwinds increase, but so do milk prices

Latin America is now well into its winter period and weaker growth has now been observed. In April, the region (data excludes Mexico, Peru and Brazil) showed 1.3% year-on-year growth in stark comparison to the strength seen earlier in the year.

Regionally, Uruguay did see another month of very strong growth (+9.7%), whereas Chile (+2.7%), Argentina (+0.5%) growth has lowered. Colombia declined to 1.5%. Data was missing from Brazil, Mexico and Peru but commentary suggests some easing, though it is variable between states. This comes against a very high production base and the strong average milk prices are not signalling a downturn.

Poor weather drives the change

Quarterra lists poor weather, particularly heavy rainfall, as the main driver for the easing in production growth, especially in Argentina.

The approaching El Niño is likely to come in next few months, expected to bring higher rainfall to dairy producing zones in Argentina, Uruguay, Southern Brazil, Chile and Northern Mexico.

Rising costs reduce some of the growth

Operating costs are rising. While feed costs have remained reasonably stable, other major inputs such as fuel and labour have grown. This has been mixed across countries and generally, very strong milk prices (at the seasonal low) have softened the impact.

The global picture

Latin America is now in the lower milk season, so the reduced year-on-year growth is not yet having a major impact on slowing global milk volumes. The severity of the El Niño will influence volumes later on in the year, as volumes pick up seasonally (peak typically in October). This could accordingly drive the global scenario, with the El Niño severity being a key watch point.

Quarterly exports have been running ahead of year ago levels since Q1 2025, and with high volumes still being produced, the region remains reliant on export markets to balance milk supply growth.

*Figure 1 is missing consistent monthly data from Mexico, Peru and Brazil

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