Summary

During the decade of the nineties, the Chilean dairy sector showed great competitive capacity as shown by high growth rates in production and substantial quality improvements of primary inputs, and by an important modification in production seasonality. Although Chile has traditionally been an importer of milk, starting in 1993, production began to increase at higher rates than domestic consumption. This has led to a significant rise of exports and a gradual reduction in the quantity of imports. The only way to sustain constant increases in milk production in an environment of slow domestic demand growth is with access to international markets. Prices paid to producers and production costs are among the world`s lowest, which, together with potential improvements to productivity and efficiency, gives the Chilean dairy sector an export potential. The realization of this potential requires a number of decisions to improve productive efficiency at both the primary and industrial level, and a better coordination among the different levels of the marketing chain. In the 90s the Chilean dairy sector showed great competitive capacity , manifested in high production growth rates, in a substantial improvement in the quality of raw materials, and in an important modification of the seasonality of production. Although Chile has traditionally been a milk importing country, since 1993 production began to grow at higher rates than domestic consumption, which is why a significant growth in exports and a gradual decrease in imports is observed. The only way to sustain constant growth in production, in a context of slow growth in domestic demand, is by accessing international markets. On the other hand, the prices paid to producers and the costs of milk production in Chile are among the lowest in the world, which, together with the potential for improvement in productivity and efficiency, allows us to maintain that Chile has significant export potential. This requires a set of actions to improve productive efficiency at the primary and industrial level, and better coordination between all sectors involved.