Overview of Uruguay's Dairy Industry

Uruguay holds a prominent position in South America's dairy sector, with a strong focus on both regional and global markets. The country's commitment to dairy production is underpinned by its advanced infrastructure and strategic market presence.

Dairy Cattle and Milk Production

The dairy industry in Uruguay is supported by approximately 720,000 dairy cows. In the first quarter of 2024, milk production saw a 2.2% increase. However, excessive rainfall and flooding in the second quarter led to a 10.6% decrease in production.

Milk Processing and Cheese Production

Uruguay processes around 1.9 billion liters of milk annually. Cheese production is a significant part of the industry, with an output of about 100,000 tons per year, showcasing Uruguay's proficiency in value-added dairy processing.

Milk Powder and Whey Production

Uruguay is a notable participant in the global dairy trade, exporting approximately 150,000 tons of milk powder and whey annually. Whole milk powder constitutes two-thirds of these exports by volume. In June 2022, whole milk powder transactions accounted for $272 million out of the total $400 million earned by the dairy sector.

Key Dairy Enterprises

Conaprole, the largest dairy cooperative in Uruguay, along with Purisima, plays an integral role in the national dairy industry. These enterprises are central to the country's dairy production and processing capabilities.

Dairy Farms and Plants

The industry comprises about 3,700 mid-sized, family-owned farms, highlighting the importance of family enterprises and modern agricultural practices in Uruguay's dairy sector.

Export and Import of Dairy Products

Uruguay is a net exporter of dairy products, with export revenues reaching approximately USD 850 million in 2024. Major markets include Brazil, Algeria, Russia, and China, while imports remain minimal, primarily serving niche markets.

Significant Events in the Dairy Industry

In 2024, heavy rains posed challenges to milk production, prompting initiatives to mitigate climate impacts. A historic trade agreement with the European Union and the Mercosur bloc is anticipated to bring significant changes to the sector. Strategic developments included Froneri's acquisition of CRUFI and Lactalis' plans to acquire Granja Pocha.

Recent Developments

In April 2025, the price paid to milk producers rose by 11%, reaching $18.05 per liter. By May 2025, dairy export revenues increased by 10% year-on-year, totaling $358 million. Despite global market volatility and unfavorable exchange rates, Conaprole maintains a stable environment by providing good price levels. Uruguay's dairy exports rose by 11%, nearing $500 million in the first half of 2025, driven by whole milk powder and butter.

Labor Disputes

The Ministry of Labour and Social Security intervened in a labor dispute between Conaprole and its union, AOEC, following a 24-hour strike and the announcement to close the plant in Rivera, raising concerns over potential milk shortages. This situation highlights vulnerabilities within Uruguay's dairy industry and underscores the need for better collaboration to prevent supply chain disruptions.

Competitive Pressures

Felippa addressed competitive pressures from Uruguayan products, which continue to dominate the market despite lacking natural advantages.

Modified: 2025/05/18