Uruguay Produces More Milk with Fewer Producers as Brazil Buys
Uruguay’s dairy industry recorded its strongest first-half performance in 2026, according to the country’s National Dairy Institute (INALE). Shipments to processing plants reached 1.025bn litres between January and June, while June alone produced a monthly record of 196m litres. The result followed a record 2025, when deliveries totalled 2.212bn litres, 8.4% more than in 2024.
External sales have remained central to the sector. About three-quarters of Uruguay’s milk production is exported as powder, cheese or butter. Dairy exports were worth approximately $965m in 2025, an annual increase of 13%. In July 2026, overseas sales reached $95m, 31% above the figure for the same month of 2025, leaving dairy as Uruguay’s third-largest export complex after beef and cellulose.
Brazil and Algeria were the principal destinations in 2025, jointly receiving more than 60% of Uruguay’s dairy exports. Their importance was also visible in July 2026, when the two markets represented about half of all Uruguayan dairy sales abroad. Whole milk powder accounted for roughly two-thirds of the country’s industrial dairy output.
The higher volumes have coincided with a smaller production base. The number of dairy farms declined from about 3,900 in the 2015/16 financial year to 2,978 in 2023/24. Producers delivering milk directly to processors fell from 2,699 in 2017 to 2,135 in 2024. Land used for dairy farming decreased from around 827,000 hectares to 623,000, while the dairy herd dropped from 767,000 to 688,000 cattle.
Output per cow rose from 4,768 litres a year to 5,825 litres over the period, an increase of 22%. Average daily deliveries by each supplier increased from about 2,000 litres to 2,600 litres. The source links the changes among continuing producers to larger operations and investment in genetics, feeding, farm management, technology and administration.
Processing is also concentrated. Conaprole, Estancias del Lago, Lactalis and Alimentos Fray Bentos receive about 91% of the milk delivered to Uruguay’s processing industry. Cooperatives account for approximately three-quarters of collection.
Producer prices and the structure of farms have changed alongside the output records. In June, farmers received an average of $16.9 per litre, 5% less than a year earlier, while the sector’s purchasing power stood 21% below its reference level. Farms of up to 50 hectares declined from 966 to 711 over seven financial years, including in dairy-producing departments such as Colonia, Florida and San José.
