Title: Uruguay beef supply chain
1The beef industry in Uruguay Buenos Aires May
2008
Lautaro Pérez Rocha lautaro_at_adinet.com.uy
2CONTENTS
- Importance of the beef sector for Uruguay
- The beef supply chain livestock production and
processing industry - Challenges and opportunities
31- Importance of the beef sector for Uruguay
4Uruguay's Shield
5Beef sector importance in Uruguay
- Economic, geographic and socio-cultural
- 6 of the GNP
- 20 of total product exports
- 87 of the land dedicated to livestock
- 3,8 cattle heads / inhabitant
- 7th world beef exporter (6 of world trade)
- 3rd world mutton and lamb exporter
67 exp.
USDA 2007
7The beef sector now
- Still the most important...
- Political and economic stability
- Investment and growth
- But...
- Intensification and competition with other
production systems
8The beef industry is going through an historical
transformation, metamorphosis
92- The beef supply chain livestock production
and processing industry
10Agricultural Gross Production
- The ag-sector is booming
- Record levels
11Beef supply chain (2007)
45.000 farms
15,4 million ha
11,6 million cattle
PROCESSING INDUSTRY
35 PLANTS
2,2 million slaughter
511 .000 cwe tons
511.000 cwe tons
Domestic 25
Exports 75
128 000
383.000
Cwe tons
Cwe tons.
12(No Transcript)
13Production systems
- Pasture raising systems
- 16 Improved or implanted pastures
- 84 natural pastures
- Extensive, open sky
- Growth promotants and hormones prohibited by law
since 1989. - Animal protein in feed prohibited by law since
1996
14Livestock Production Highlights
- Stable cattle and ovine stock
- Strong increases in productivity, particularly in
the fattening sector - Heavier and younger animals
- High Investment / Gross Production Ratio
- Implanted and Improved Pastures
- Cow-calf sector still lagging
15Uruguay cattle and sheep stock evolution,
1980-2007
16Uruguay cattle slaughter, 1980-2007
Source INAC, 2007
17Uruguay Beef Production, 1966-2008 (tons cwe)
5 growth 2001-2006,
18Sanitary status
- Free of FMD with vaccination
- One of the 4 countries categorized as BSE free
(minimum risk) by the OIE, 2006 - E Coli 0157H7 not detected in beef
19Increase in pastures and annual forages
20- Cow calf sector
- The calf stock increased because of more cows
and heifers being served younger - Calves weaned per breeding cow served ratio
still low (65) - Finishing / Fattening sector
- Younger and heavier animals
21Uruguay Steer Nominal Price, 1985-2008 (USD / kg
live)
FMD
Source INAC
22Steer Prices selected countries, May 2008
30
70
Note prices are for export steers
23Processing plants
- 35 Slaughterhouses, 17 approved US EU.
- 8 plants with more 150.000 heads/ year
- Capacity investments since 2003
- Aggressive process of acquisitions since 2006
- 8 plants owned by foreign investors (more than
60) - 28 Slaughter by one Brazilian group in 4 plants
24Traceability
- Lot Traceability, DICOSE System, 1973.
- Objective curtail smuggling and help with the
eradication of FMD. - Farmers are given a code consisting of a region
number, a police station number, and a farm
number. - Every movement must be recorded and the animal
accompanied by its paperwork. - Accepted by the UE in 1998.
- Individual Identification, 2006.
- Declared of National Priority by law, 100
mandatory for 2010 - Financed by the government
- Visual ear tag and RFID (12 digits)
- Farmers must communicate every movement
- Official operator or transport operator register
the transaction and send data to MGAP
25Ear tag National Identification System
26Traceability
- Electronic data information system for the
Processing Industry - Operative in 36 plants
- Animal data gathered at disassembly lines sent to
INAC - Will allow to track meat to individual animals in
2010.
27The government role?
- Deregulation during the 90s
- Allowed to export live cattle
- Elimination of regulating stocks for domestic
market. - Allowed to export raw hides.
- Aggressive and solid sanitary and market access
policies - Regulations for enhancing process traceability,
animal welfare, food safety, data and information
systems. - Minimum interference in market rules
-
28Uruguay export value and markets, 1980-2008
2008 1st quarter
29Export Income per cwe ton, 2003-2008
30Challenges and opportunities
31Profit Margin / ha 2006/07
32World meat prices far behind the upward trend in
other commodity prices
Source FAO Regional Office for Asia and the
Pacific, Nancy Morgan, May 2008
33Average Land Prices in Uruguay, 2000-2007
18 annual growth
34Drivers of change Uruguay Livestock farming
- Increased emphasis on traceability and food
safety - Increased consolidation of farms and ranches
- Value based marketing programs
- New paradigm in the ag sector
- Competition among different food chains,
particularly for land uses - Geographic redistribution of livestock farming
- Investment, intensification, search for higher
productivity - The role of Brazil as the new world protein
supplier - Increased and varied international demand
35Thank you
FROM FARM TO THE CONSUMER