Milking to 2030: Economic and sustainability prospective of the Mexican dairy sector

Abstract

Objective: This study aims to assess the productive and economic performance of the Mexican milk sector, particularly focusing on small and medium-scale dairy farms, and examining pessimistic, base, and optimistic scenarios.

Design/methodology/approach: Employing a statistical univariate method with time series analysis (ARIMA), we analyzed productive efficiency and price behavior in Mexican dairy systems. Deterministic and stochastic estimations for production volume, milk price, and cattle inventory from 2021 to 2030 were established using confidence intervals to construct pessimistic (lower interval), base (mean), and optimistic (upper interval) scenarios.

Results: The evaluated period witnessed an estimated 10.27% increase in production, equivalent to 576 million liters of milk, with an average annual growth rate of 1.0922%. Milk prices displayed an upward trend, with average prices of $0.66, $0.69, and $0.72 under pessimistic, base, and optimistic scenarios, respectively. In 2030, a 22% price increase compared to 2021 was observed. Considering a base price of $0.45 USD per liter in 2030, costs under pessimistic, base, and optimistic scenarios were $1,658.21, $1,756.43, and $1,855.31, resulting in profits of $1,160.75, $1,229.50, and $1,022.45 from milk sales. Cattle inventory exhibited an upward trend, paralleling milk volumes and prices.

Limitations on study/implications: The study's use of a univariate method may incompletely capture market dynamics complexity, potentially underestimating the impact of external market forces and global economic conditions on milk prices.

Findings/conclusions: To secure forecasted milk volumes in base and optimistic scenarios, maintaining and enhancing good management practices is crucial. Additionally, addressing the imperative to augment production efficiency and improve environmental sustainability and animal welfare is essential.