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 yearly. 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, utilizing 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.

Discussions revolved around regulatory and tax burdens, with claims that lowering them could boost competitiveness. The future of the Uruguayan company Calcar hangs in the balance as it considers offers from a worker's cooperative and a multinational dairy company. Uruguay's dairy export requests rose by 10% in April, shifting from \$58 million to \$64 million as reported by Uruguay XXI. Uruguay's export values showed a slight decline in early April compared to March's peak. Milk powder has risen over USD 1,800 since August and leads exports, with the global market showing resilience but with potential future changes.

Education and Innovation

The Superior School of Dairy in Uruguay marks its 95th anniversary, renowned for providing technical education in dairy production, attracting students from both domestic and international backgrounds.

Uruguay's dairy market in April demonstrated a slight decline. The average export price decreased by 0.77% to USD 3,870. The export volume fell by 9.97%, dropping to 7,113.89 tonnes. Total milk product exports reached 15,015.25 tonnes at an average price of about USD 3,885 per tonne.

The second edition of Mercoláctea in Uruguay showcased the best of dairy breeds. The event is a significant gathering for the dairy industry, featuring salon activities, livestock exhibitions, and international delegations.

Calcar's Tarariras plant in Uruguay is set to resume operations. The Tarariras plant in Uruguay will resume operations with tasks related to milk packaging.

Recent Developments

In April 2025, the price paid to milk producers in Uruguay hit an unprecedented milestone. The price of milk in Uruguay increased by 11% in April 2025 compared to the same period in 2024, reaching \$18.05 per liter for the first time. The increase includes enhancements in payments both in pesos and dollars, as well as for solid content.

Modified: 2025/05/18