Uruguay's Dairy Production Normalizes Amid Financial Concerns

Uruguay's dairy industry is beginning to see signs of recovery after experiencing a decline in milk production since autumn 2024. According to recent reports, the level of milk remittance to industries is starting to "normalize." Despite this positive trend, concerns over a "complex" financial situation continue to trouble dairy producers.

Challenging Financial Conditions

The president of the Sociedad de Productores de Leche de Florida, Horacio Rodríguez, expressed optimism about the climate, noting favorable rains towards the end of 2024 that benefited the sector. However, Rodríguez emphasized the need for a price increase for milk producers due to rising costs. He remarked that dairy farmers face a "complex" financial landscape and that additional measures are necessary to support them.

Impact of Drought and Price Fluctuations

To mitigate the impact of drought and falling prices over the last two years, producers have resorted to a four-year credit from Banco República. Nonetheless, an "important level of indebtedness" is expected as the industry navigates these challenges.

Current Market Prices

Currently, there is a positive margin in dairy production, with the price of milk around $0.40 per liter and the cost of corn between $240 and $250 per ton. Rodríguez anticipates that corn prices may decrease with the upcoming harvest.