Image source:

 

Uruguay: A Leading Nation in South America's Dairy Industry

Uruguay stands out as a key player in the dairy industry within South America, with its well-developed system of dairy cattle and goats, substantial milk production, and active participation in international dairy trade.

Dairy Cattle and Milk Production

The backbone of Uruguay's dairy sector is its dairy cattle population, which numbers approximately 720,000 cows. This population ensures a steady supply of raw milk essential for a variety of dairy products. In 2024, Uruguay faced variations in milk production. The first quarter saw a promising 2.2% increase, but challenges such as excessive rainfall and flooding caused a 10.6% decrease in the second quarter.

Milk Processing and Cheese Production

Despite these setbacks in production, Uruguay processes about 1.9 billion liters of milk each year, demonstrating resilience in its industry. Cheese production is a significant facet of Uruguay's dairy output, with an annual production volume of approximately 100,000 tons.

Milk Powder and Whey Production

Uruguay is also a vital player in the global dairy trade, exporting around 150,000 tons of milk powder and whey annually. This highlights its strategic role in meeting international dairy demand.

Key Dairy Enterprises

• Conaprole: The largest dairy cooperative in Uruguay, providing vital contributions to the dairy industry.
• Purisima: A well-known company involved in dairy processing and production.

Dairy Farms and Plants

The Uruguayan dairy industry consists of around 3,700 mid-sized, family-owned farms. These farms focus on modern agricultural practices, playing a crucial role in ensuring a consistent milk supply and emphasizing family business significance in the dairy landscape.

Export and Import

Uruguay is a net exporter of dairy products, with export revenues reaching approximately USD 850 million in 2024, exceeding the previous year's figures. Key export markets include Brazil, Algeria, Russia, and China, particularly for milk powder. Import of dairy products is minimal, predominantly catering to niche segments.

Significant Events in the Dairy Industry

In 2024, heavy rains posed challenges to milk production, prompting governmental and industry-led strategies to mitigate climate effects and stabilize future production. A historic trade agreement with the European Union and the Mercosur bloc, including Uruguay, holds the potential for significant sectoral shifts, despite early hurdles. According to Rabobank's Q4 report "A Period of Prosperity," an increasing milk supply is noted in major dairy-exporting countries, including Uruguay.

The European Commission President Ursula von der Leyen's visit aimed at advancing a trade deal that could bolster EU relations with South American nations. Additionally, Froneri's acquisition of Uruguay's CRUFI, a company famed for ice creams and frozen foods, highlights ongoing strategic changes. The Uruguayan Dairy Workers Federation opted not to engage in actions related to Coleme.

Uruguay's dairy sector ended 2024 with a turnover of $853.9 million, reflecting modest growth of 0.5% from the previous year, as per the National Institute of Milk (INALE). Cooperatives like Conaprole navigated financial challenges through governmental agreements. Discussions with Uruguay's Minister of Livestock, Agriculture, and Fisheries, Fernando Mattos, stressed the necessity for broader commercial agreements. Uruguay remains a minor contributor to Russia's dairy imports.

The producer price of milk in Uruguay saw a significant 19% increase in local currency, enhancing purchasing power though still below its historical peak.

Uruguay’s industrial sector has witnessed a remarkable 8% growth in exports in 2024 compared to the previous year, surpassing the levels achieved in 2022.

Modified: 2025/03/10