Dairy Industry in Paraguay

Paraguay is establishing itself as a notable player in the South American dairy market, characterized by a strong domestic processing sector and a diverse range of dairy products. The nation is home to approximately 600,000 dairy cattle, contributing to an impressive annual milk production of around 700 million liters. Of this, about 450 million liters are processed domestically, underscoring Paraguay's robust processing capabilities.

Production and Processing

The diversity of Paraguay's dairy production is evident, with the country producing an estimated 10,000 tons of cheese annually and achieving approximately 5,000 tons in milk powder and whey production. This diversity showcases the sector's capacity to produce a wide variety of dairy products.

Key Enterprises

Prominent companies such as Lactolanda, COOPROLE, and La Pradera are central to Paraguay's thriving dairy industry. Key dairy farms, including Agropecuaria Guarani S.A., Granja Avicola la Blanca, and Agropecuaria Asumrona, play significant roles in the industry's growth and development.

Trade Insights

Paraguay is active in the international dairy market, exporting around 50 million liters of milk and dairy products annually, primarily to neighboring countries. Concurrently, the country imports approximately 35 million liters of dairy products each year, mainly from Argentina and Brazil.

Market Events and Developments

The EU-Mercosur trade agreement represents a significant development, potentially enhancing market access for Paraguayan dairy producers and attracting further investments. Lactolanda plans to introduce new products and leverage technological advancements by 2025 to strengthen its market presence. Artisanal cheese production using raw milk in Ñeembucú contributes unique flavors and adds value to the market. Nestlé Paraguay is improving production and export facilities in Villarica, targeting markets such as Bolivia, Chile, Uruguay, and Peru.

Emerging Sectors

The artisanal goat farming sector is gaining momentum, exemplified by family-run projects like Agroganadera Don Diego. Additionally, the introduction of genetic buffalo breeding is transforming dairy production, creating a niche market for premium products like mozzarella and dulce de leche.

Challenges and Opportunities

Despite climate challenges affecting production volumes, the industry benefits from stable prices and strong domestic demand. The EU-Mercosur agreement, expected to be signed under Paraguay's Presidency, presents new opportunities for boosting agricultural exports. Lactalis' investment is driving growth, with plans to expand industrial capacity in Paraguay and establish a regional export hub. Paraguay is exempt from the EU's import ban as it complies with health standards, allowing continued exports to the European market.

International Collaboration

Paraguay has launched a project to strengthen its dairy industry through international collaboration. This initiative includes a data management platform and a Good Practices Manual, supported by Costa Rica and Germany, as part of a broader strategy to enhance the competitiveness and sustainability of the country's dairy sector.

Technological Advancements

IAF Ingeniería's technology has been installed in Paraguay, establishing a regional presence in developing solutions for the dairy industry.

Recent Achievements

Paraguay saw a 5% increase in milk production in the first half of 2026, with daily outputs surpassing 2.6 million liters. The growth was driven by improved producer prices and the addition of new dairy farms. The export levels have doubled compared to the same period in the previous year. A cow from Tambo y Cabaña Penner in Paraguay set a new national record by producing 108.7 liters of milk in 24 hours, facilitated by advanced genetic selection and the use of a compost barn system.

Investment and Growth

Paraguay attracts foreign capital for milk and whey production. Foreign investors are pursuing dairy projects in Paraguay, with Dutch capital linked to milk production and a New Zealand initiative focused on whey protein. Paraguay is part of the Mercosur bloc. New Zealand is considering a trade agreement with the Mercosur bloc, which includes Paraguay, as an alternative to a bilateral deal with Brazil.

Paraguay is projected to produce more than 1 billion liters of milk in 2026. The country has about 5,000 milk producers and employs between 15,000 and 16,000 people in dairy processing and sales. The industry is expanding its processing capacity and product range, focusing on high-protein yogurt, goods containing probiotics and prebiotics, protein-enriched milk, and kefir. Paraguay exports surplus milk as milk powder to Central America, the Dominican Republic, parts of the Middle East, and recently, Brazil.