Uruguay's Dairy Industry: A Comprehensive Overview

Uruguay's dairy industry has navigated a landscape of challenges and opportunities over recent years. In 2024, the sector experienced a 10.6% decline in milk production due to adverse weather conditions. However, the industry rebounded in the first half of 2025, with milk deliveries improving by 5.7%, culminating in an annual production of approximately 2.219 billion liters, with 1.9 billion liters processed.

Cheese and Milk Powder Production

Uruguay is renowned for its cheese production, generating about 100,000 tons annually. The country is also a significant exporter of milk powder, with whole milk powder constituting two-thirds of the 150,000 tons exported each year. This export is crucial to Uruguay's national export revenues.

Key Enterprises and Export Markets

Conaprole, the largest dairy cooperative, plays a pivotal role in Uruguay's dairy industry. In 2024, sector revenues reached USD 850 million, with primary export markets including Brazil, Algeria, Russia, and China. By mid-2025, exports had risen by 11%, nearing USD 500 million, primarily driven by whole milk powder and butter.

Market Trends and Financial Developments

In July 2025, dairy export prices increased by 9%. By June 2025, the average farm milk price had improved to $17.8 per liter, enhancing financial conditions for producers. Additionally, bank debt among farmers decreased to $190 million, the lowest level in 30 months.

Strategic and Labor Events

Labor disputes involving Conaprole and the AOEC led to government intervention and a national strike following the closure of a Conaprole distribution center in Rivera, emphasizing the need for strategic partnerships for industry stability.

Environmental Innovation

Conaprole's commitment to environmentally innovative dairy farming was recognized when it became a finalist in the IDF Dairy Innovation Awards 2025 for its sustainable practices.

Export Growth

In October 2025, Uruguay exported 47,778 tons of dairy products, with dairy export revenue for the first ten months of 2025 increasing by 19% compared to the previous year, driven by rising international demand.

Record Revenue in 2026

In the first four months of 2026, Uruguayan dairy farmers reported record gross revenue of $272 million, the highest in seven years, attributed to a production surge with 640 million liters of milk produced from January to April.

International Trade in Dairy Cattle

Uruguay has leveraged international trade opportunities by exporting dairy cattle to Turkey, providing significant numbers of heifers and representing a strategic opportunity for Uruguayan cattle breeders.

Technological Advancements

A new app developed in Uruguay has enhanced the income of 70% of pilot dairy farms by improving data management and production planning. This innovation was showcased at the Inale 2026 Forum.

Diversification of Export Markets

Uruguay has expanded its export markets to Indonesia, diversifying amid competition from established suppliers. Milk production saw significant growth between January and April, marking a historic record in milk remittance with 2.212 billion liters in 2025.

Challenges in Milk Purchasing Power

The milk purchasing power index fell to 95 points, an 11% decline from the previous year, primarily due to rising production costs and a reduction in the price of milk in local currency.

Quality and Craftsmanship in Cheese Making

Uruguayan cheese makers have gained international recognition, with Quesería Landkäse's Sardo with Pepper cheese winning a gold medal at ExpoQueijo Brazil 2026.

Cheesemaking Tradition

Uruguay is home to around 800 artisanal cheesemakers, with a tradition dating back to 1861 when the first cheese factories were established in the Colonia and San José departments.

Expansion Initiatives

The National Colonization Institute aims to expand dairy farming, focusing on supporting family-run dairy production projects crucial for the national economy.

Export Trends

In August, Uruguay's dairy exports amounted to USD 64 million, a decline from USD 90 million the previous year. Electricity-charge discounts for milk producers and dairy companies have been introduced.

Retail and Distribution

Lucciano’s operates four outlets in Uruguay, contributing to the retail landscape. Uruguay faces competition from Brazilian producers, with objections raised concerning imports from Argentina and Uruguay.

Trade Relations

Uruguay is involved in a trade case with Brazil over milk powder and was allocated 324,000 tonnes of beef exports to China for 2026 under preferential tariff conditions. Uruguay has engaged in a dairy dispute with Brazil concerning anti-dumping duties on milk powder, impacting Brazil’s domestic market.

Consumption and Market Trends

Uruguay recorded the lowest milk-to-maize ratio at 1.66kg per liter. The market shows divergent trends: liquid-milk consumption has declined since 2020, while cheese consumption has continued to rise and butter has remained broadly stable. Inale economists have identified higher-value uses for whey proteins and growing consumer interest in protein-rich, lower-sugar foods.

Events and Cultural Activities

Uruguay’s Cheese Week takes place from October 9th to 18th in Montevideo and the eastern part of Colonia. The event includes the 20th Uruguayan Cheese Competition with an international format and the third Uruguayan Cheese Festival in Nueva Helvecia, combining food production, gastronomy, tourism, training, and cultural activities.