Costa Rica dairy farms

Big dairy farmers along with agricultural producers might want to buy small Costa Rican dairies, as the market gets tough for operations without either scale or specialization.

Low-cost imports from Nicaragua threaten to make small dairy businesses uncompetitive, following the announcement last week of an alliance between Mexico’s Grupo Lala and Costa Rica’s Florida Ice and Farm.

Latin America’s biggest dairy company, Lala recently acquired several Nicaraguan dairy producers, including La Perfecta, Eskimo and San Benito.

Production costs, including land and labor, tend to be lower in Nicaragua than in Costa Rica.

For its part, Fifco has one of Costa Rica’s biggest beverage distribution operations, which can be adapted to include milk.

Costa Rica’s biggest beer company, Fifco is also a major producer and distributor of fruit juice and bottled water.

The Costa Rican dairy market has for decades been dominated by the Dos Pinos cooperative, whose market share is close to 80%.

Based in Torreon, Lala has 19 production facilities and 166 distribution centers in Mexico and Central America.

The company in 2015 had revenue of $3 billion.

Fifco last year reported revenue of $1.2 billion.