Characterization of the physical losses in the Argentinean dairy value chain: Opportunities and challenges

Abstract

This research identifies and quantifies physical losses in the Argentinean dairy value chain as an opportunity to gain competitiveness. It is based on a survey of the Argentine dairy sector, validated with experts of this industry, during the years 2018 and 2019. The study considers the value chain from the time the milk enters the plant, through transformation and distribution, until it reaches the customer. A specific questionnaire was designed for the consultation consisting of semi-structured interviews with referents of dairy companies. The analysis and interpretation of the collected data were carried out using spreadsheets and graphics. The results were compared and validated against the information of an official national survey.
The Argentinean dairy value chain processes around 10,000 million liters per year, with an annual turnover of 8,993 million USD FOB (Free On Board) factory. Of the 577 companies that process raw milk, the research includes a third of the companies that represent nearly 80% of the processed milk. The level of physical losses detected represents about 232 Million USD per year, equivalents to 382 Million liters of milk. Origins, Causes, and Factors were correlated to analyze improvement alternatives and how they can be valued from an economic perspective.
This research is representative of the Argentinean dairy sector and covers theoretical aspects such as linking physical losses to Causes, as well as the economics involved. The study concludes that companies can improve their performance and be more sustainable by prioritizing management actions before investing and providing a framework to implement the necessary changes