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Uruguay

Uruguay is the world's 8th largest beef exporter and competes directly with Australian beef in the US, EU and Russian markets.

Key recent trends/developments

• Exports decreased in 2007 due to tight cattle supplies, lower slaughter and high export prices.
• Exports diversion from the NAFTA market, to Russia and the EU.
• High cattle and beef export prices in 2008 driven by Russian and EU demand.
• Decrease in beef slaughter and production in 2007, as a result of 2006’s high slaughter to supply increasing prices and demand in Russia as a result of Brazil’s and Argentina's restricted beef access and supplies.

Herd size

• The Uruguayan cattle herd was estimated to total 11.6 million head in 2007 (INAC).
• Uruguay’s cattle herd is less than half the size of Australia’s (29 million head), less than a quarter the size of Argentina’s (51 million head) and 7% of the Brazilian cattle herd (around 170 million head).

Beef production

• Production in 2008 is estimated to reach 590,000 tonnes, an increase of 7% on 2007 levels, while slaughter is expected to increase 11%, to approximately 2.5 million head (USDA).

Beef consumption

• Uruguay exports the majority (around 70%) of its beef production.
• Beef per capita consumption in 2007 was 56 kg (USDA).

Beef exports

• In 2007, Uruguay exported 248,005 tonnes swt of unprocessed beef, a decrease of 19% on 2006 (INAC).
• The main destinations of Uruguayan beef during the first half of 2008 were Russia (41%), EU (23%) and US (6%).
• Uruguayan exports in 2007 were valued at US$792 million, at an average price of US$3,192/tonne, a 6% price increase on 2006.
• For the period January to June 2008, average export prices have increased to US$4,708 per tonne, driven by strong demand and high prices from Russia and the EU.

• In 2006, Uruguay diverted beef away from its main market, the US, to focus on Russia, achieving higher prices. During 2007 exports returned to the US, totalling 112,576 tonne swt, still far from 2005’s levels which totalled 201,203 tonnes swt. In 2008 Uruguay has again diverted from the US, with only 8,775 tonnes swt shipped during the period Janury to June. Uruguay exports mainly frozen lean manufacturing beef to the US where it is in direct competition with Australian, New Zealand and US product.
• In addition, Uruguayan exporters pay a 26.4% out of quota (20,000 tonnes) tariff in the US, payable on the majority of product imported into the US from Uruguay. Rather than incur the tariff, exporters can currently earn better returns in other markets.
• Uruguay has a 20,000 tonne country specific US beef quota. In contrast, Australia and New Zealand have US beef quotas of 398,214 tonnes and 213,402 tonnes respectively. Uruguayan exporters generally reserve their quota for high value beef items and export the majority of manufacturing products outside of quota.
• Mexico reopened to Uruguayan fresh beef in 2007, with a total of 5,200 tonnes exported to that market.

Competition with Australian red meat exports

• Australia and Uruguay compete directly against one another in the US market. However, during 2008, Uruguayan beef has had a reduced presence in the US market as it has diverted shipments to Russia and the EU (due to Brazil’s and Argentina’s reduced exports to these countries).

FMD status

• Uruguay is considered by the World Organisation for Animal Health (OIE) to be “FMD free with vaccination”. This status allows Uruguay to export unprocessed beef to the US.