Today, around 40 dairy producers in the autonomous community dedicate their livelihoods to milk production. In Teruel, sheep and goats lead the way, shaping much of the region’s dairy output, while in Huesca cows dominate milk production. Supermarket shelves are the final stop for these products, where the consumer ultimately determines value.
Despite differences in origin, the sector faces largely similar challenges. Current costs are squeezing margins as producers struggle to keep up with the price levels agreed at the start of the year, which have remained stubbornly fixed despite the crisis triggered by the war in Ukraine.
“We’ve been together for several months, absorbing losses. This isn’t the first time we’ve confronted a crisis, but this time there’s little sign of relief,” explains Vicente San Francisco, president of the Turolense Cheese and Dairy Producers Association and owner of a cattle ranch and cheese factory in Teruel. The association includes seven farms, most with connected cheese factories, indicating a tightly knit network of dairy activity in the region.
In Teruel province, there are about 5,000 sheep and around 1,500 goats producing milk. The rise in production costs has been steep, with costs climbing roughly 50 percent while the price they demand for milk rose by barely 5 percent, translating to just over 30 cents per kilogram.
“A kilo of feed costs between 8 and 12 euros, and electricity and water have become much more expensive too,” San Francisco notes. He adds that not every extra cost can be passed on to the final product. If milk or cheese prices at supermarkets rise in step with production costs, the market will quickly become unaffordable for consumers, and the situation will stay grim for producers.
For beef producers, the situation echoes the dairy sector. The price farmers request for each liter of milk is roughly 45 cents, a figure intended to cover expenses. “To cover costs and earn a minimal margin, the price should be around 48 cents. Right now we are not losing money, but we are not making a profit either, and many people aren’t working just to break even,” explains José Antonio Rami, president of the Alto Aragón Dairy Cooperative and owner of the Copirineo brand, representing about 80 percent of the community’s producers.
“Egypt is gone? The reference may seem odd, but if costs keep rising, no one will be able to undertake production. Prices are expected to stay elevated, and there is little relief on the horizon,” says Rami, highlighting a bleak forecast with no anticipated decrease in production costs.
Residents of Huesca and Teruel acknowledge that slaughtering older animals has become a survival strategy to cope with rising costs. Rami explains the approach: animals that produce less are sent to slaughter, and meat prices often exceed those of milk, offering a temporary buffer for farms grappling with cash flow pressures.
There is also concern about generation change within farms. The current generation plans to retire sooner than expected, while younger generations are drawn away by alternative employment opportunities, making it harder to sustain family-owned dairy operations. As the Huesca cooperative president notes, many younger farmers opt to pursue other avenues when profitability dwindles, and some older farmers have already closed their operations.
More than a million euros aimed at reducing losses
Recently, the Ministry of Agriculture, Fisheries and Food announced a national package of support. A total of 159.3 million euros will be distributed to 18,797 cattle, goat and sheep milk producers as part of the dairy sector aid under the national response plan to the war in Ukraine. In Aragon, 67 farmers will receive these funds, with allocations including 1,063,869 euros for cattle, 45,128 euros for small cattle, and 37,290 euros for goats, totaling 1,146,288 euros for the regional dairy sector, according to official statements.