Uruguay: a small country but a big beef player

Uruguay has a history steeped in cattle production and its economy has a major agricultural focus. It plays a big role in the worldwide export of beef, accounting for around 5% of the world’s total volume of traded beef.

The country is classified as foot-and-mouth disease-free with vaccination, and all animals are routinely vaccinated under government regulations. Uruguay has one of the largest per-capita consumption figures in the world at 50kg of beef per annum.

It also has a number of distinct advantages when it comes to beef production. Its warm humid climate is perfect for grass growth and all animals are kept outdoors during winter. Sheds are a rarity on a beef farm. Its extensive native grasslands are well suited to grazing animals and have the potential for high grass yields when managed correctly.

Uruguay’s cattle herd comprises 12m head, of which 85% is made up of Aberdeen Angus and Hereford, with Hereford being the predominant breed.

Traditionally, animals are slaughtered at three years of age at 500kg liveweight. Kill-out averages 54%, leaving beef carcases at 270kg. There has been a move in recent years to slaughter animals at a younger age and lighter carcase weight. There has also been a shift away from grass-based finishing to finishing animals on grain-fed diets in large feedlots.

These feedlot-finished animals command a higher price in the market and it’s also a requirement for the high-value 481 European quota that animals spend 100 days minimum in a feedlot on a grain-based diet. These feedlots are generally closely aligned with factory processors and some owned by the processors themselves.

INAC

Uruguay has a very successful public-private partnership, the National Institute of Meats (INAC), which is funded via 0.6% of the value of beef exports. INAC is responsible for the marketing of beef, food safety and international promotion. Board members include processors, government and farmers.

Since 2010, under INAC guidance, all animals born in the country have been individually tagged with electronic tags and a cattle movement and traceability system was initiated where all animal movements are logged on a central database. The farmer has six months from birth to tag the animal and then another six months to process paperwork associated with the registration process.

Beef systems

Similar to Scotland, beef production systems in Uruguay could be put in three distinct categories – cow-calf operations selling weanlings or store cattle, integrated suckler calf-to-beef finishing systems, and trading systems purchasing weanlings/store cattle and finishing off grass or via feedlot.

Cow-calf operations are in general confined to poorer-quality marginal land, with finishing systems and feedlots positioned closer to the better-quality arable land.

During the soya bean price boom, some of the marginal land was cropped with varying degrees of success and this reduced the amount of land available for beef production. However, with soya bean prices reducing, this land has returned back to pasture-based beef production. In recent years, sheep production has fallen with this land returning to cattle systems.

Feedlots have become to play a more important role in the Uruguayan beef industry, with many animals, especially steers, spending a minimum of 100 days in a feedlot prior to slaughter.

There are more than 100 registered large feedlots in Uruguay, ranging in size from 2,000 head capacity to 20,000 head capacity. These feedlots purchase store animals from calf/store producers and are generally connected to a local processor via a contract to supply cattle.

Animals for slaughter generally have to travel long distances to slaughter plants and, because of this, some farmers sell their cattle on a liveweight basis, weighed on farm before they leave.

In general, the processor pays the transport costs. Animals are traded mostly on-farm via agents and a growing number of animals (33%) are now traded in large lots via video auctions, where feedlots can assemble large numbers of cattle relatively quickly.

Due to lack of availability of cattle, many feedlots are under capacity at the moment. A typical feedlot is targeting £15-35/head net margin on a 100-day cycle, so numbers and throughput are very important.

Animals are typically fed a maize-based diet with byproducts from soya processing also incorporated into diets depending on the region.

Monensin (a feed additive banned in EU since 2006) is fed routinely to feedlot cattle to aid the digestive process and facilitate a fast transition period on to ad-lib concentrates and prevent bloat. It also aids in the control of coccidiosis in feedlot animals.

While feedlots generally receive a higher government inspection rate, environmental issues persist around runoff and disposal of animal manures. There are 39 registered slaughter plants in Uruguay slaughtering 3.5m cattle annually. Marfrig is the largest processor, accounting for 25% of the annual cattle kill.

Feeding woodchips

While feedlots at home have been making good use of byproducts in recent years, Uruguay is taking it to the next level. On one visit to a 3,000-head feedlot killing 60 animals a week, I noticed woodchip stored in a silo-bag alongside grain and casually asked in my best Spanish was the woodchip for bedding. It was actually for feeding.

Javvier Sabbia, the nutritionist in charge of the feedlot, explained that this practice has been tried and tested in Uruguay and other countries with good results and no adverse effects on animals.

He explained: “Good straw is expensive and bad straw is a poor fibre source, so we are incorporating 4% fine woodchip in the diet as a fibre source. Woodchip is currently costing around £72/t delivered. The current diet of the feedlot animals is 6kg high-moisture sorghum grain, 1.6kg of sorghum silage, 1.7kg of distillers grains, 0.4kg of woodchips and minerals. Animals are currently gaining 1.4kg/day and spending on average 90 days in the feedlot depending on starting weight.”

A lucrative market that many feedlots have capitalised on is the export market to Turkey and Egypt. Feedlots can purchase light weanlings off farms in marginal areas at 160-180kg liveweight and put them into feedlot until they reach 260-280kg, at which point they are exported to Turkey.

The margin over feed costs in this system is more profitable than finishing animals at the moment.

Case study: Francisco Albisv

Francisco Albisv farms about two hours north of Montevideo. The farm consists of 300ha of grassland, 300ha of crops and 100ha of forestry.

On the grassland, 900 animals are grazed, consisting of 300 cows, 300 calves and 400 beef animals (feedlot finished). The farm has a small feedlot which finishes the farm’s own cattle and also 1,000 bought-in cattle annually.

The annual cycle on this farm is spring-calving, calving in September/October and November. Calves are weaned at six months, wintered and grazed until 18 months when they enter the feedlot for a four-month finishing period.

Franciso’s target is to have weanlings weighing 200kg at six months, ready to wean. There are four people working on the farm – one person on arable (750 acres), one person in the feedlot (400 animals) and two people on the cow-calf operation (600 animals).

Calving

During calving, cows are checked every three days by gauchos on horseback and 95% of cows on this farm calve unassisted.

Cow breed is predominantly Aberdeen Angus and the sire of choice is also Aberdeen Angus. Heifers are artificially inseminated each year and natural service stock bulls are used on the cows.

Francisco is typically paying between £2,000 and £3,600 for pedigree Aberdeen Angus bulls and he runs one bull to 30 cows during the breeding season.

Grassland stocking rate is quite low at less than one cow/ha and all animals are out-wintered on carryover grass and some conserved forage.

Cows are dosed for fluke annually and calves receive clostridia vaccines and are dosed for worms on a regular basis.

He recently planted 100ha of eucalyptus trees on the more marginal parts of the farm. This means Francco can avail of tax breaks on his farming profits. He is also able to graze in between the trees, four years after planting.

World exports

Uruguay as a beef-producing country has massive potential to become a serious player in world exports of beef.

Through INAC, its co-ordinated approach to tagging and traceability has delivered in the form of increased market access to China and the US. The country’s huge domestic consumption of beef is a massive positive to the industry.

However, there are still issues around environmental regulation and animal welfare standards, they are slowly growing their exporting power and have already held discussions with UK buyers about the potential of entering the UK market in a post Brexit-scenario. Watch this space.