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Uruguay's Dairy Industry: An Overview

Uruguay emerges as a significant entity in South America's dairy sector, characterized by its robust dairy systems, active international trade, and ongoing challenges and opportunities. The nation’s commitment to dairy production has allowed it to carve out a competitive advantage in both regional and global markets.

Dairy Cattle and Milk Production

At the core of Uruguay's dairy sector lies its considerable dairy cattle population, numbering approximately 720,000 cows. This substantial population guarantees a steady supply of raw milk, essential for producing a wide array of dairy products. In 2024, Uruguay experienced fluctuations in milk production, starting with a 2.2% increase in the first quarter, later offset by a 10.6% decrease in the second quarter due to excessive rainfall and flooding.

Milk Processing and Cheese Production

Despite production challenges, Uruguay successfully processes around 1.9 billion liters of milk annually, demonstrating the industry's resilience. Cheese production is an integral part of this process, with an annual output of approximately 100,000 tons, showcasing Uruguay's proficiency in value-added dairy processing.

Milk Powder and Whey Production

Uruguay is a significant player in the global dairy trade, exporting about 150,000 tons of milk powder and whey each year. This solidifies its strategic role in meeting international dairy demand and reflects its competitiveness in the global marketplace.

Key Dairy Enterprises

• Conaprole: The largest dairy cooperative in Uruguay, making vital contributions to the national dairy industry.
• Purisima: A reputable company engaged in dairy processing and production.

Dairy Farms and Plants

The Uruguayan dairy industry includes approximately 3,700 mid-sized, family-owned farms that utilize modern agricultural practices. These farms are crucial in maintaining a steady milk supply and underscore the importance of family enterprises within the dairy sector.

Export and Import of Dairy Products

Uruguay stands as a net exporter of dairy products, with export revenues reaching approximately USD 850 million in 2024, surpassing previous years' figures. Key export markets include Brazil, Algeria, Russia, and China, predominantly for milk powder. Imports of dairy products remain minimal, largely serving niche market segments.

Significant Events in the Dairy Industry

In 2024, heavy rains challenged milk production, sparking governmental and industry initiatives to mitigate climate impacts. A historic trade agreement with the European Union and the Mercosur bloc, which includes Uruguay, promises significant sectoral changes. The visit by the European Commission President aimed at advancing trade relations may strengthen EU ties with South American nations.

Furthermore, notable strategic shifts occurred, such as Froneri's acquisition of CRUFI, an ice cream and frozen foods producer. Conaprole witnessed a decrease in milk deliveries, and Lactalis planned to acquire Granja Pocha, a cheese and yogurt producer under the Colonial brand. Granja Naturalia, a premium cheese producer from Uruguay, is expanding its market reach to Paraguay and Argentina, while solidifying its foothold in Brazil. However, the decline in milk volume poses a critical threat to small local industries in Uruguay, leading to facility closures, such as that of the Calcar cooperative.

The Uruguayan government is contemplating stepping in to cover up to 40% of the $2.5 million debt owed by the now-defunct dairy cooperative, Calcar, to its producers. The sector ended 2024 with a $853.9 million turnover, reflecting modest growth despite these challenges.

Modified: 2025/04/27