Argentine Dairy Farmers to `Sacrifice' Cows Over Price Caps

Dec. 12 -- Argentine farmers plan to ``sacrifice'' some dairy cows tomorrow to protest government price controls on milk, posing a challenge to newly elected President Cristina Fernandez de Kirchner.

An unspecified number of Holstein milk cows will be shipped to Argentina's biggest livestock market, Guillermo Draletti, president of the General Union of Dairy Farmers said today. Farmers sent more than 1,000 cows to slaughterhouses last week, he said. Economy Minister Martin Lousteau announced a price cap on untreated milk of 78 centavos (25 cents) a liter on Dec. 4.

``We will sacrifice our oldest cows tomorrow as a form of protest,'' Draletti said in an interview. ``Small and medium- sized farmers can't survive this new measure.''

Fernandez de Kirchner, who replaced her husband Nestor Kirchner as president on Dec. 10, seeks to maintain a policy of capping food prices to protect Argentine consumers from rising global commodity prices. Cattle ranchers and wheat farmers say the measures force them to plow up land or sell their herds to grow soybeans, which are freer of government controls.

Argentine farmers also are protesting outside of plants owned by dairy co-operative SanCor SA, Draletti said. Agriculture Secretary Javier de Urquiza yesterday urged farmers to open talks with the government.

Production Costs

Dairy farmers say the price cap may lead to milk shortages because production costs are 75 to 80 centavos a liter, newspaper Clarin reported Nov. 30. Argentina is the world's third-largest milk-powder exporter, behind New Zealand and the European Union, according to the U.S. Department of Agriculture.

Argentine sales of untreated milk to dairy companies fell 12 percent to 4.2 million liters in the first 10 months of 2007 from a year earlier, according to statistics provided by the agriculture secretariat.

Global cheese and milk-powder prices have doubled in the past year as demand rose and a surge in biofuel crops cut the amount of arable land available for food production.

Milk demand may increase by 2.5 percent a year through 2010 and prices are likely to remain elevated for some time, Rabobank Groep, the world's largest agricultural lender, said in a report in October.