Uruguay: The Small Giant of Dairy Exports

Uruguay 30.06.2025

Sourse: DairyNews.today

Uruguay, a small country, has long established a reputation as a dairy exporter with an efficient production model. According to the National Dairy Institute (INALE), the country produces 2.3 billion liters of milk annually, with 90% of this volume processed by dairy facilities and 70% exported, reports Ana Pedemonte of INALE.

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The main driving force of the sector continues to be farmers' cooperatives. The largest of these — CONAPROLE — accounts for 71% of milk processing. It is followed by Estancias del Lago (9%), Lactalis (3%), Alimentos Fray Bentos (3%), and other players.

As researcher Ana Pedemonte notes, Uruguay’s success is largely based on a smart combination of pasture-based systems with targeted use of concentrates and roughage. The average farm has 110 milking cows, with a productivity of about 20 liters of milk per cow per day.

However, the sector is not homogeneous. According to the study by Pedemonte et al. (Agrociencia Uruguay, 2024), there are six main types of farms, differing in intensity and feeding strategies. The most efficient farms are those with high stocking rates (more than 1.26 cows per hectare) and optimized diets that include concentrates and roughage. These farms achieve the lowest cost per liter of milk and the best economic outcomes, but they represent only 25% of all producers.

At the same time, 28% of farms remain in a low-productivity and economically unviable zone, which calls for government intervention and technological development. Recommendations include increasing the share of grass in the diet, improving pasture management, and raising stocking density.

Despite these challenges, Uruguay remains competitive thanks to its focus on quality, cooperative model, and strong political support for the sector. In a world facing instability from Middle East conflicts and price volatility, this flexibility may become a key advantage for the country in the global dairy market.