Uruguay like Ireland has a relatively small population, about 3.5m, yet has a cattle herd that fluctuates between 11m and 12m head.

About 10% of the herd is dairy the reminder is beef with traditional breeds of Hereford and Angus dominant and very few continental beef breeds.

Another thing it has in common with Ireland is that it exports the vast majority of its production, around 75% annually, while Ireland exports 90% of the beef produced.

Like Ireland, Uruguay had a prominent presence at Anuga in the meat hall this week and also like Ireland it has a levy-funded national meat promotion agency, the national meat institute (INAC) and the Irish Farmers Journal spoke with INAC president Federico Stanham at the show.

Overview of Uruguay beef industry

He explained that the national herd has been stable for the past 15 years, and before that has grown from around nine million due to the reduction of the sheep herd.

In the 1990s, the sheep herd was around 25 million, mainly wool (Merinos) breeds and double-purpose breeds (Corriedale), and a number of smaller breeds.

Due to poor prices for wool, the total sheep herd has been reduced to around 6.5 million, with a similar breed composition but with higher presence of breeds more specialised for mutton and lamb (Texel, Hampshire Down, Southdown, Higlander, Mitschalf, and a number of others) which are normally crossed with the traditional herd. Some farmers have introduced ultra-fine wool breeds looking for the high-value niche in the world markets.

Due to poor prices for wool, the total sheep herd has been reduced to around 6.5 million

Last year, factories handled 2.3m cattle and 970,000 sheep and INAC collected a levy of $17.5m on the beef and beef by-product sales from these, which works out at $7.50/head.

This would give an average of US$7,45/head slaughtered. Given that traditional breeds dominate the Uruguayan herd, carcase weights are typically averaging 250kgs.g.

Farmers

There are about 42,000 farmers in Uruguay, which means the average size of farm is 350ha. However just over half of farmers have less than 100ha and 27% have between 100ha and 500ha, leaving 14% between 500ha and 3,000ha and 1% more with more than 3,000ha.

Most are family farms. In recent times, there has been an increasing amount of business-type farms, many owned by non-nationals, particularly investors from Argentina, Brazil, Europeans, and North Americans.

The INAC president told the Irish Farmers Journal that environmental concerns were as big an issue in his country as they are in the EU.

He pointed out that natural forests are protected, with the area having increased 11% over the past 15 years.

There is also a policy that encourages new tree plantings, for commercial forestry, and that now 12% of land use is in forestry compared with 8% 15 years ago.

Traceability and transparency

Uruguayan farmers enjoy a particularly favourable climate with a year-round growing season, meaning very little housing of cattle is required. They made a decision in the 1960s to ban the use of hormone growth promoters and calves have to be recorded and tagged before they are six months old.

Every movement during the animal’s life is recorded and they have a price reporting system managed by INAC both for cattle and beef that is exported, meaning that farmers can see the value they receive compared with what the factories get for selling beef.

The optimum point is when deadweight cattle prices are 92% of the beef price, which is currently $4,200t (€3818t) but as the farmgate price is $4.15/kg (€3.77/kg) it means that factories are currently being squeezed.

Mercosur

The INAC president was adamant that the EU secured a very good deal on beef access, saying that while the quota appears generous, in practice with half of it for frozen beef it will lead no real increase in import volumes.

Rather he says that the reduction of the Hilton tariff to zero and creation of a 7.5% tariff for other imports up to 99,000t carcase weight, 76,000t of beef means that what will happen is that Uruguayan exporters will keep more of the value they receive rather than paying tariffs.

He was strongly of the view that the real challenge to all beef farmers comes from the opponents of beef

He was anxious to emphasise that the EU would not be overrun with Uruguayan beef (or other South American beef) and while he understood farmers fears he was strongly of the view that the real challenge to all beef farmers comes from the opponents of beef as opposed to beef farmers in other countries.

He also noted that the current Uruguayan beef price was ahead of the Irish price and well ahead of South American neighbours. The Uruguayan value is established by export markets as that is where the vast proportion of beef produced is sold, unlike in Brazil and Argentina where domestic markets consume three-quarters of production.