Uruguay's Dairy Industry: An Overview

In 2024, Uruguay's dairy industry encountered significant challenges, notably a 10.6% decline in milk production due to adverse weather conditions. Despite these difficulties, the sector demonstrated resilience, achieving a 5.7% recovery in milk deliveries during the first half of 2025. By the end of 2025, annual production reached approximately 2.219 billion liters, with 1.9 billion liters processed.

Cheese and Milk Powder Production

Uruguay produces around 100,000 tons of cheese annually and is a key exporter of milk powder and whey. Whole milk powder is particularly significant, comprising two-thirds of the 150,000 tons exported each year, contributing substantially to the country's export revenues.

Key Enterprises and Export Markets

Conaprole, the largest dairy cooperative in Uruguay, plays a central role in the sector. In 2024, dairy industry revenues reached USD 850 million, with primary export markets including Brazil, Algeria, Russia, and China. By the first half of 2025, exports increased by 11%, approaching USD 500 million, driven mainly by whole milk powder and butter exports.

Market Trends and Financial Developments

In July 2025, dairy export prices rose by 9%. As of June 2025, the average farm milk price increased to $17.8 per liter, enhancing financial conditions for producers. Bank debt among farmers decreased to $190 million, the lowest in 30 months.

Strategic and Labor Events

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

Environmental Innovation

Conaprole was recognized as a finalist in the IDF Dairy Innovation Awards 2025 for its sustainable practices, underscoring Uruguay's commitment to environmental innovation in dairy farming.

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 for Uruguayan dairy.

Record Revenue in 2026

During 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 capitalized on international trade opportunities by exporting dairy cattle to Turkey, providing significant numbers of heifers, representing a strategic opportunity for Uruguayan cattle breeders.

Technological Advancements

A new app developed in Uruguay has improved the income of 70% of pilot dairy farms by enhancing data management and production planning. This development was showcased at the Inale 2026 Forum, focusing on key aspects like animal feeding and production targets.

Diversification of Export Markets

Uruguay has expanded its export markets to Indonesia, diversifying its reach amid competition from established suppliers. Milk production increased significantly between January and April, with a 9% year-on-year rise, achieving a historic record in milk remittance with 2.212 billion liters in 2025.

Challenges in Milk Purchasing Power

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

Quality and Craftsmanship in Cheese Making

Uruguayan cheese makers have gained recognition for their quality, with Quesería Landkäse's Sardo with Pepper cheese winning a gold medal at ExpoQueijo Brazil 2026, showcasing the craftsmanship of the country's cheese makers.

Cheesemaking Tradition

Uruguay is home to around 800 artisanal cheesemakers who continue a tradition dating back to 1861. The first artisanal cheese factories were established in 1861, particularly in the Colonia and San José departments. The Queso Colonia, a semi-hard cheese first produced by Swiss settlers, symbolizes the country's culinary heritage.

Expansion Initiatives

The National Colonization Institute aims to expand dairy farming, focusing on supporting family-run dairy production projects crucial for the national economy. The Florida Milk Producers Society is conducting a pilot project with 43 male Holando calves to assess their viability amid high meat prices and changes in rearing systems.

Export Trends

Uruguay's dairy exports amounted to USD 64 million in August, a decline from the USD 90 million recorded in the same month a year earlier, representing a 29% decrease in export value. Uruguay has introduced electricity-charge discounts for milk producers and dairy companies for the 2026 calendar year, ranging from 15% to 80% depending on contracted power and, in some cases, consumption limits.

Retail and Distribution

Lucciano’s has four outlets in Uruguay, contributing to the retail landscape of the country's dairy market. Uruguay was mentioned in the context of competition with Brazilian producers. The increase in imports has generated objections from Brazilian producers and dairy companies concerning competition from products supplied by Argentina and Uruguay, both partners in Mercosur. Uruguay's principal dairy processor, Conaprole, received 5.7 million liters of milk each day. Conaprole, Uruguay’s leading dairy processor, saw a 5% increase in milk deliveries during the first 13 days of September. National milk production rose 10.5% from January through July.

Uruguay is a major supplier of milk to Brazil, providing 23% of Brazil's milk-equivalent imports in August.