Suspension of Milk Purchases in Panama by Nestlé Concerns Livestock Farmers

Milk producers are on alert due to Nestlé’s suspension of milk purchases.  Samuel Vernaza, president of the National Association of Cattle Ranchers (Anagan) said that the company notified the suspension of milk purchases from producers on the Tonosí and Villa Lourdes routes in Los Santos, scheduled for the week of August 15-23, for maintenance reasons, and from September 5 onwards, definitively.  “We are trying to prevent this company from leaving, because Nestlé’s departure would cause great uncertainty and unrest, and such an action would lead to the collapse of the sector. This puts primary milk production in the country in serious trouble,” Vernaza said. 

The president of Anagan called on the national government to intervene and prevent the suspension of the purchase and Nestlé’s alleged withdrawal from the country.  The cattle farmers indicated that they will stop purchasing about 16,000 liters of milk on time, harming more than 400 agricultural producers, primarily those dedicated to producing grade C milk.  “They would stop purchasing 16,000 liters of milk daily out of the 35,000 liters they were buying, leaving them with only 19,000 liters daily, a 45% reduction,” said the president of Anagan. 

“This is an impact on the smallest producers in our value chain, our production chain, who are the producers of grade C milk. And if this situation were to occur, they would be left completely helpless in the face of the bank loans they have already agreed to and other issues such as the unemployment it would generate in the area where they operate their daily activities or operations,” he warned.  Dairy industry sources indicated that Nestlé is not leaving Panama and that it is simply a specific maintenance issue that has led to the temporary suspension of milk receipts and purchases. The company is expected to issue a statement detailing the matter.