Uruguay's Dairy Sector Faces Decline in Farmers Amid Production Growth

In Uruguay, the dairy industry is witnessing a concerning trend where the number of dairy farmers is declining faster than the historical average. This development comes even as the country's dairy production and exports have seen growth in 2025, highlighting a paradox within the sector.

According to data published on January 28, 2026, by local industry sources, the reduction in dairy farmers poses a significant challenge to the sustainability of Uruguay's dairy industry. The National Dairy Institute (INALE) of Uruguay has noted these changes, which have sparked alarm among stakeholders in the sector.

Despite the reduction in the number of producers, Uruguay's overall milk production has increased, suggesting that larger operations may be absorbing the market share left by smaller farmers exiting the industry. Additionally, Uruguay continues to be a significant player in the global dairy market, with exports contributing substantially to the national economy.

The dynamics within the dairy sector are complex, as they involve both domestic farm operations and international trade. The sustainability of Uruguay's position as a dairy exporter might depend on addressing the challenges faced by small and medium-sized producers.

These developments underscore the need for strategic interventions by industry regulators and policymakers to maintain the health of the dairy sector while supporting the livelihoods of dairy farmers in Uruguay.