Uruguay’s Estancias Del Lago prioritises irrigation to reduce milk costs
José Pedro Sánchez, Estancias Del Lago’s director of operations, said at SIAL Paris that the company regarded irrigation as its most efficient investment option. “Today we are not seeing a better investment for us in terms of efficiency than irrigation,” he said.
The company’s herd produces an average of about 43 litres per cow per day. Milk contains approximately 5% fat and 3.7% protein, according to Sánchez. About 540,000 litres a day are processed in the company’s own whole-milk-powder operation. The remaining volume, equivalent to roughly two or three tanker loads, is sold to other dairy processors in Uruguay.
Estancias Del Lago does not currently plan to build another drying plant. Sánchez said the present surplus was not large enough to justify that investment, and estimated that a new facility would require about 500,000 additional litres of milk a day to operate at an appropriate scale. The company is therefore focusing capital on the agricultural production that supplies its existing plant.
According to the company, irrigated fields can produce silage yields close to twice those of non-irrigated areas, while reducing unit costs by between 20% and 30%. The reported results depend on the crop, soil, infrastructure and growing season. Feed now accounts for between 58% and 60% of total milk-production costs, compared with about 50% a year earlier. Sánchez put the price of maize at around $250 a tonne and said a strong Uruguayan harvest could help moderate that level.
Irrigation is also being developed alongside measures to manage weather-related variation. The company recorded a good ryegrass-silage campaign and completed its planned maize sowing for September. Rain and limited sunlight in October delayed the harvesting of wheat silage, with some loss of quality, and postponed parts of the maize and soybean planting. Estancias Del Lago is also building new livestock facilities, including a sand-bedded barn for about 700 cows in the El Mirador area.
The company has spent more than four years raising male dairy calves for beef rather than treating them as a discarded category. Holstein males and calves from beef crosses enter an intensive rearing and finishing system. They remain in pens from birth until reaching about 380kg at nine to ten months, with reported daily gains above 1.2kg. Some are later finished at other yards or farms, and buyers have taken animals that can reach final weights of nearly 650kg.
Estancias Del Lago is also using genomic evaluations, sexed semen and, in some cases, embryo transfers. Cows with the highest dairy genetic merit are used to produce replacement females, while beef semen is used on cows with lower dairy merit. The company said the programme aims to improve weight gain, efficiency and meat characteristics, including marbling, without establishing a separate breeding herd. The operation employs 630 people directly in Durazno; including contractors and related services, Sánchez estimated total employment at close to 1,000 positions.
