Uruguay Dairy Industry Overview

Uruguay stands as a pivotal player in South America's dairy sector, contributing significantly to its agricultural exports. The industry, while facing challenges like climate-related impacts, remains robust and progressive.

Dairy Cattle and Goats

The country maintains around 720,000 dairy cows, which are essential for maintaining its milk production capacity. These cattle are the cornerstone of the dairy sector, supplying the necessary raw materials for a variety of dairy products.

Milk Production and Processing

In 2024, Uruguay's milk production exhibited fluctuations. The first quarter saw a 2.2% increase, but the second quarter experienced a substantial decline of 10.6% due to excessive rainfall and flooding. Despite these challenges, Uruguay efficiently processes approximately 1.9 billion liters of milk annually, showcasing its adaptability to changes in milk supply.

Cheese and Milk Powder Production

Cheese production is critical in Uruguay's dairy output, with about 100,000 tons produced each year. Additionally, Uruguay is a significant player in the global dairy trade, exporting approximately 150,000 tons of milk powder and whey annually.

Key Dairy Enterprises

• Conaprole: The largest dairy cooperative in Uruguay, playing a significant role in the industry.
• Purisima: Another major entity involved in dairy processing and production.

Dairy Farms and Plants

Uruguay's dairy sector consists of about 3,700 mid-sized family-owned farms that employ modern practices. These farms are crucial to the milk supply, highlighting the importance of family-owned agricultural enterprises in the country's dairy landscape.

Export and Import

Uruguay is a net exporter of dairy products, with annual exports reaching approximately USD 500 million. Its main export markets include Brazil, Algeria, Russia, and China, particularly for milk powder. On the import front, Uruguay's focus on niche categories leads to minimal dairy imports.

Recent Events

In 2024, excessive rains significantly impacted milk production. The government and industry stakeholders are devising strategies to mitigate such climatic effects, aiming to stabilize future outputs. This emphasizes Uruguay's resilience and enduring influence in the global dairy trade, although a year-over-year milk production decline of 1.0% was noted.

The EU-Mercosur trade deal proposes to connect the EU with South American countries, including Uruguay, potentially impacting the dairy industry further. Despite earlier weather-related setbacks in the year, profitability has improved, supporting a near-complete production recovery. Rabobank's fourth-quarter report, "A Period of Prosperity," marks a critical moment for milk supply growth across the leading dairy-exporting regions, including Uruguay.

Primary production in Uruguay remains below 2023 levels despite recent recovery signs, underscoring the resilience and ongoing challenges in the sector. European Commission President Ursula von der Leyen arrived in Uruguay on Thursday, aiming to finalize a long-debated trade agreement. The newly finalized trade agreement between the European Union and the Mercosur bloc—comprising Argentina, Brazil, Paraguay, and Uruguay—stands as a historic achievement.

Modified: 2024/12/08

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