Conaprole Increases Milk Production by 14% but Chooses Not to Reallocate Surplus

Conaprole, Uruguay's leading dairy cooperative, concluded its 2025/2026 fiscal year with a production of 1.73 billion liters of milk, marking a 14% increase from the previous year's 1.517 billion liters. This significant growth reflects the overall expansion of dairy production in the country. However, the cooperative's board decided not to proceed with a price reallocation in July, aiming to stabilize the price paid to producers in the face of international market volatility.

The increase in production coincides with challenges in the global market to absorb the surplus, particularly affecting the demand for whole milk powder, skimmed milk powder, and cheeses. This scenario prompted Conaprole to prioritize price stability over immediate additional payments to producers.

International market trends, specifically the Global Dairy Trade (GDT) index, are expected to play a crucial role in the coming months. The latest GDT auction in July saw the overall index rise by 1.5%, with an average price of USD 3,815 per ton for all products. Notably, whole milk powder, Uruguay's main export product, experienced a 1.6% increase, averaging USD 3,486 per ton.

This decision marks a departure from the previous two fiscal years, during which Conaprole made several reallocations to enhance the price received by its suppliers. Despite the surplus and production growth, the cooperative's strategy focuses on preserving resources to sustain milk prices in the medium term. The ability to maintain this policy will depend on international price trends and the capacity to place the growing production volume in external markets.