USDA GAIN: Livestock and Products
14 September 2012
USDA GAIN: Uruguay Livestock and Products Annual 2012
Uruguayan beef exports for 2013 are projected up at 375,000 tons, carcass weight equivalent, and the highest
level since 2009. This is a result of an expected slightly higher slaughter, larger beef output and fewer cattle
exports in 2012 and 2013. Beef consumption is expected to be lower in 2012 and 2013, with a growing
participation of poultry and pork. 
Production:
Uruguayan beef production in 2013 is forecast up at 540,000 tons carcass weight equivalent (cwe). This is a
result of a projected larger slaughter and somewhat heavier average carcass weights. The herd and productivity
continue to recover from the 2008-09 severe drought, which reduced the herd during 2009-2011 by
approximately 700,000 head (greater losses and lower calf crops). The cattle slaughter is projected at 2.23
million head, higher than the previous two years, but still marginally lower than the several past years as the
herd has yet not fully recovered. Also another reasons for an expected larger slaughter is the significant drop in
cattle exports from 2010-2011, increasing the supply for domestic slaughter.
The impact of high world grain prices will force producers to be more efficient as more pasture land is turned
into crop production and feed costs continue to increase. On the one hand, the least productive cow-calf
operations will need to adopt improved management tools (e.g. better feeding, adjusted health programs, etc.)
to increase their calf crops. On the other, cattle finishers are expected to increase the efficiency in the use of
pastures in combination with the use of strategic supplementation whenever returns permit. Uruguay has 17
million hectares of which roughly 14 million hectares are utilized for cattle production. High oilseed prices
continue to take away the best pasture land and the heavy investment in forestry/wood pulp industry continues
to expand over land from the cow-calf sector. In the past ten years Uruguay passed from planting 500,000
hectares of summer crops to over 1.2 million hectares (primarily soybeans). During the same period, forest land
increased 1 million hectares (although much of this area is used in combination with cow-calf production). At
the same time, a significant drop of 5 million head in the sheep flock helped to partially offset the loss of
production capacity. In the future, we foresee agricultural operations working integrated and diversified among
the different activities (crops, forest and cattle), making the most efficient use of the land and other resources.
Due to current high commodity prices, the use of grains to feed cattle are in debate, as in many cases returns
are negative. However, in the long run, the use of sorghum, which is very popular, is expected to increase
further in the next few years. It is an excellent crop which is well adapted to Uruguay’s agricultural
environment, and combines well in rotation with soybeans. Sorghum is typically produced on-farm and used as
cattle feed in the form of humid grain silage and at a lesser extent as silage made of the entire plant.
Smaller calf crops due to the strong drought of 2008-09, large exports of live cattle, and the significant increase
in Uruguay´s FOB average price have made feeder cattle prices go up substantially. The price of male calves is
about US$2.50 per live kilo, while fed steers sell at US$1.90 per live kilo. Current good returns are expected to
encourage cow calf operations to become more efficient and try to expand production somewhat. Uruguayan
ranchers have historically given a lot of importance to fatten the cull cows as the differential price of fed cows
and fed steers is quite small because cows have a strong demand in the domestic market. Therefore, many feed
resources were directed to finishing cows rather than focusing on the production of calves. The average
weaning ratio continues to remain at about 64 percent. While top producers reach 80 and higher ratios, many, Cattleother, in general smaller producers obtain poorer weaning ratios. Early weaning is gaining in popularity as it
increases significantly the pregnancy rates of the following season.
Regarding the finishing of cattle, there are three distinct manners. One that has been in place for several years
is done on natural pastures and raise 4-5 year old fed steers; another is based on cattle fed on implanted or
improved pastures, and in many cases with the support of humid grain sorghum during some key periods,
including during the first winter and during the last few months before going to the market. Nowadays these
producers have good returns as low cost grass is the base of their feed. Another alternative to finish cattle is on
feedlots, which due to current high commodity prices and expensive feeder cattle, returns in most cases are
negative. There are just a couple of hotel-type operations with capacity ranging from 4-10,000 head. All the
rest are either owned by producers or meat packing companies. There are 6-7 meat packers which own theirs
and generally use them as a buffer for when there are some cattle supply shortages. The country´s total instant
capacity is estimated roughly at 200,000 head, which can be used 2.5 times a year, giving a potential capacity of
500,000 head per year. At current slaughter volumes this would represent roughly 50 percent of the total fed
steers.
Despite current tight or negative returns, the fact that Uruguay was recently authorized to participate as a
supplier of EU´s 620 Quota (formerly 481 Quota) which is exclusively for high-quality beef from steers or heifers
which are less than 30 months of age, are hormone free, and have been fed high energy feed for a minimum of
100 days. At current prices and costs, contacts indicate that returns are very tight, but if prices and costs adjust
there is great potential to boost this type of production as the current quota volume is 45,000 tons and
Uruguayans are quite confident that they will be able to make use of a good portion of it. Currently there are
some 50 registered feedlots to operate under this new quota. Some of the main limitations are the price of
feed and profitability, and the short time frame to raise and finish the cattle in Uruguay.
Hereford has been the predominant breed in the history of Uruguayan cattle. However, in the past few years,
Angus is gaining share. Braford and Brangus are much smaller breeds but in the northern areas they are
becoming more popular. Fed steers are typically marketed between 490-510 live kilos, while fed cows generally
weigh 420-450 live kilos.
There are almost 40 slaughter plants in Uruguay with a total capacity of 3 million head. The top 10 plants
account for approximately 65 percent of the total registered slaughter. There are eight plants in hands of
foreign capital, primarily Brazilian. Of the country´s total slaughter, the vast majority is done in officially
inspected plants, which have government control boxes. About 50,000 head a year are consumed on farm and
roughly 30-50,000 head are slaughtered in very small abattoirs in the interior of the country which only have
local inspection. In general, the meat packing industry is in good economic condition and has been investing
heavily in the past few years in increasing processing and cold capacity.
The government has a few programs under the Programa Ganadero to support small cattle producers to
improve production efficiency and their income. In general, the government’s policy for the sector is to
maintain stable policies, promote investment, provide transparent information and to continue to have a very
strict sanitary system to allow the opening of new markets.
Consumption:
Domestic beef consumption for 2013 is projected at 165,000 tons, slightly higher than the previous year as a
result of an increase in production. Most analysts believe that consumption has reached a ceiling and that there
is a stronger competition from alternative meats, especially poultry. Uruguayans enjoy eating beef, especially short ribs which is very popular in barbecues. In general, cuts which have limited export markets or prices are
consumed domestically.
Poultry consumption is forecast to continue to expand at a 5-10 percent increase as prices are less expensive
than beef. Per capita consumption for 2013 is forecast at about 22 kilos. Pork consumption is also expected to
expand, but at a faster rate. Per capita consumption for 2013 will increase to about 12 kilos. Pork prices are
very competitive and consumers are eating more fresh pork. Lamb is consumed on-farm and in smaller towns
in the interior.
Trade:
Uruguayan beef exports for 2013 are projected up at 375,000 tons cwe, the highest since 2009. This is a
response to an expected larger beef output, to the opening of new markets, the consolidation of new quotas
and to attractive world beef prices. Uruguay exports normally range between 60-70 percent of its total beef
production.
Uruguay has approximately 120 markets open, of which it supplies to roughly 100. The country is free of foot
and mouth disease with vaccination and presents a negligible risk for BSE. Uruguay´s sanitary status is well
recognized as well as its traceability program and its "natural" production system. Exporters take advantage of
the best prices paid by each market for each product. The main markets for 2013 are expected to be:
The Russian Federation, which normally buys frozen boneless beef, with the majority being non premium cuts
for industry use, such as trimmings and fore quarter cuts. Some cuts for the retail market could be exported.
Most likely Uruguay will fulfill EU’s 6,300 ton Hilton Quota for chilled boneless premium cuts. Rump and loin for
Germany is currently priced at US$14,000 per ton. The country exports also cuts outside the quota which are
priced lower. There is a lot of expectation about the 620 Quota (former 481) which the EU has open in 2009 for
imports of hormone-free beef from young animals which were fed at least 100 days with high energy rations.
The quota for 2012-13 is 45,000 tons and only the USA, Canada, Australia, New Zealand, and Uruguay have
access to it. The first shipment under the quota was done in February 2012 and it included almost all cuts,
chilled and boneless. Local exporters are confident Uruguay could export ten percent of the total quota in
2013. During 2012 exports under this quota will range between 1,000-1,500 tons.
Israel normally takes frozen, Kosher boneless fore quarter cuts. It has lately been growing as result of
Argentina´s drop in exports.
The US market grants Uruguay every year a 20,000 ton quota which in 2013 is expected to be filled, the same as
in 2012. Practically all exports are frozen lean trimmings. No premium cuts are exported. Traders believe that
some product which currently is exported to the Russian Federation could be redirected to the US.
Canada is also a market which Uruguay ships to under an 11,000 ton quota for other countries. Products are
very similar to what is exported to the US.
Chile is an important market for boneless chilled beef. Almost all cuts, except rump and loin, are exported.
However, this market has been dominated by Paraguay which is currently excluded due to two outbreaks of
foot and mouth disease in 2011 and 2012. Most traders expect Paraguay to be eligible to export in 2013,
making shipments from Uruguay drop.
Venezuela is expected to continue to be an important market. Since mid 2012, this country is now a member of
Mercosur. However, beef exports will have no additional advantages as before joining, there were no quotas
nor duties. Venezuela takes many cuts, mostly frozen and boneless.
Brazil continues to be an interesting market for chilled top sirloin cap or picanha, one of the most popular cuts.
Argentina is a market for bone-in short ribs, but lately local traders have found many difficulties in exporting to
that country.
Mexico is open to Uruguayan beef, but so far, no trade has been made.
Korea is in the last phase of several steps to open its market to Uruguayan beef. This would be the first case of
Korea opening to beef from a supplier with a foot and mouth disease free with vaccination status. Traders are
confident that the market will open during the last part of 2012. However, exporters indicate that it will take
quite a bit of time for it to become an important market.
Uruguay has had a long history of exports of live cattle, both beef and dairy. However, since 2006 the number
of head rose significantly, reaching a peak in 2011 with 213,000 head. Most exported cattle are beef feeder
calves for Turkey and female dairy calves and heifers for China. Contacts indicate that the government has
slowed down export permits as a way of reducing somewhat this kind of trade. Meat packers prefer to keep
these animals in-country, while cattlemen are very happy with this trade as it gives them another marketing
channel. Through July 2012 some 45,000 head were exported, while brokers estimate exports at 60,000 head
for 2013.
Stocks:
The local cattle stock is projected at 11.4 million head by the end of 2013. This shows that the herd is slowly recovering after the severe drought of 2008-09. If feeder cattle prices continue to be strong, we expect higher calf crops in the future.
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