Miller Magazine Issue: 131 November 2020

uruguay 82 MILLER / November 2020 idents), won the elections. On his first month he had to deal with the coronavirus, a crippling public deficit (around 4%) and unemployment on the order of 10%. So far, his government has been successful containing the pandemic without any mandatory quarantine, and passed two large packages of legal reforms, but it is too soon to make predictions on his final results. ECONOMY By tradition, the focus of the economy has been cattle breeding, since the Spanish "planted" cattle here and al- lowed it to become wild. When the first settlers arrived, they had abundant beef literally running around so to never care about other forms of production. Even indus- trial production started tied to cattle, as slaughterhouses and leather tanners of the XIX century exploited the wild cattle to supply the raw materials they later exported. Gradually, over the first century of existence of this coun- try, agriculture and sheep breeding where introduced. By the end of XIX, agriculture occupied an area of 350.000 hectares, and cattle breeding counted 14 million animals. By the end of XX, in comparison, agriculture occupied over 1 million hectares, and cattle counted as 13,5 mil- lions. About 85% of the country's land is apt for agriculture, but only between 30% and 50% of this potential is actu- ally used. Many factors lead to this, but the cultural pref- erence for extensive production (which has lower costs but also lower returns) and a poor transportation net- work are the main culprits. Also, the country was a little technologically backwards in this aspect, until a massive migration of Argentinian farmers at the start of 2000’s caused a transference of know how that increased pro- duction. Now those same farmers are migrating to Par- aguay because the land prices are cheaper, but their knowledge stayed. Another factor lead- ing to an increase in land use is forestry, as lands which could not be economically used for any crop are being exploited by planting eucalip- tus for paper pro- duction. The main grains harvested are wheat, soybeans, rice, and corn; with the double annual production of wheat and soybeans in the same fields be- ing pretty common. Barley is also im- portant in quantity, but is mostly grown on contracts with brewing compa- nies, so very little is left to be sold as feed. The natural export market for Uruguayan wheat is Bra- zil, but only manages to do that when the grain achieves the specifications of millers. Argentinian and Paraguayan wheat is more competitive in the Brazilian market. There are two mills (with several facilities) that con- trol wheat flour production in Uruguay. One is Molino Cañuelas, owned by the Navili family, of Argentina; and the other one is Molino San José, that belongs to the Gard family, who also owns COUSA, the only local oil mill. Because of the dimensions of the market, it is almost impossible to give a precise number on the production of each mill. To further complicate things, many mix im- ported products with local ones. This is especially true for animal feed mills, which import a lot from Argentina and Brazil. The feedlot business started just 25 years ago, when Patricia Damiani brought the innovation to Uruguay, and has grown to be both a contender and integrated in the beef production chain. Now, between 10% and 20% (roughly 2 million animals) of all cattle in Uruguay is bred in feedlots, and the subproducts of the milling industry have an important place there. With the crisis in Argentina, it is expected that this industry grows a lot in the following years. A deregulation of the beef market in Uruguay would allow prices to grow up to 25%, attract- ing even more investors. Chicken meat production is around 31.630 tonnes, less than a third of the maximum of the decade. Egg pro-