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

Uruguay continues to be a vital player in the South American dairy sector, showcasing resilience and growth despite facing challenges such as climate variability. The country's dairy market demonstrates a focus on maintaining production levels and developing robust export channels.

Dairy Cattle and Goats

The cornerstone of Uruguay's dairy industry is its dairy cattle population, numbering approximately 720,000 cows. This population is instrumental in supplying the raw milk necessary for a diverse range of dairy products.

Milk Production and Processing

In 2024, Uruguay experienced fluctuations in milk production. After a promising start with a 2.2% increase in the first quarter, challenges arose due to excessive rainfall and flooding, leading to a 10.6% reduction in the second quarter. Despite these challenges, Uruguay processes about 1.9 billion liters of milk each year, showcasing the industry's adaptability.

Cheese and Milk Powder Production

Cheese production is a key component of Uruguay's dairy output, with an annual volume of approximately 100,000 tons. Moreover, Uruguay plays a significant role in the global dairy trade, exporting around 150,000 tons of milk powder and whey each year.

Key Dairy Enterprises

• Conaprole: The largest dairy cooperative in Uruguay, providing significant contributions to the dairy industry.
• Purisima: Another prominent company engaged in dairy processing and production.

Dairy Farms and Plants

The Uruguayan dairy sector is composed of around 3,700 mid-sized, family-owned farms, which emphasize modern agricultural practices. These farms are vital for the steady supply of milk and highlight the role of family businesses in the country's dairy landscape.

Export and Import

Uruguay stands as a net exporter of dairy products, with export revenues reaching approximately USD 850 million in 2024, surpassing figures from the prior year. Its primary export destinations include Brazil, Algeria, Russia, and China, especially for milk powder. Uruguay's import of dairy products is minimal, focusing on niche segments.

Recent Events

The year 2024 witnessed issues due to substantial rainfall affecting milk production. This prompted the government and industry leaders to devise strategies aimed at mitigating climate impacts and stabilizing future production. Additionally, a historic trade agreement between the European Union and the Mercosur bloc, which includes Uruguay, could bring significant changes to the dairy sector. Despite early hurdles, profitability showed improvement, approaching full recovery in production levels. Rabobank's fourth-quarter report "A Period of Prosperity" highlights the increased milk supply across leading dairy-exporting countries, including Uruguay.

Key Developments

The visit of European Commission President Ursula von der Leyen to Uruguay is a noteworthy milestone, aimed at finalizing a trade agreement that could enhance EU's relations with South American nations. Furthermore, Froneri's acquisition of the Uruguay-based company CRUFI, renowned for its ice creams and frozen foods, underscores ongoing strategic shifts within the sector. The Uruguayan Dairy Workers Federation decided against taking action in relation to Coleme.

Overall, the Uruguayan dairy sector concluded 2024 with a turnover of $853.9 million, reflecting a modest growth of 0.5% from the previous year, according to the National Institute of Milk (INALE).

Modified: 2025/02/05

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