The early Portuguese and Spanish colonizers who claimed vast resource-rich territories in South America neglected a small patch of land between present-day Brazil and Argentina. This land, Uruguay, lacking in gold or silver, became home to wild cattle descended from those brought by the Spanish before the land was even settled. Under these circumstances, the beef industry cemented itself early on as a pillar of the country’s identity and its economy.
With a population of only 3.4 million, Uruguay is now known for its premium English breed of cattle that roam uninhibited in one of the best preserved pastures in the world. Gauchos (i.e. cowboys) clad in ponchos, swinging bolas, facos dangling down their leather belts, dot the middle plains. If gauchos hold a romantic place in popular imagination of Uruguay, so does the meat from the cattle they masterfully herd in bucolic plains and low-mountain ranges. Beef holds such a special place in Uruguayan culture that when the populist former president José Alberto "Pepe" Mujica ran the Ministry of Agriculture, he won the hearts of many Uruguayans with cheap access to assado, beef rib grilled over an open fire.
Today, Uruguay’s economy benefits from sizable exports of premium beef to the EU, the US, and most recently to China. In 2015, beef exports generated $1.5 billion in revenues and comprised 16 percent of the nation’s exports. The story of how this land, half the size of Germany with four times as many cattle as people, managed to whittle its way out of competition with its two giant neighbors, provides an insight into the astounding nature of the challenges that small nations face in achieving global prominence and testifies to the level of ingenuity and resourcefulness that policy makers and farmers have to resort to in order to succeed.
Uruguay’s large flatlands, adequate soil quality, and small population size ensured that the cattle industry would remain an economic and cultural feature of the small country into the present day. As ranching became more established in the 19th and 20th centuries, producers laid the foundation for a quality-focused industry by importing English Hereford cattle, a breed renowned for its high-quality beef. Today, the country boasts the largest purebred herd of Herefords anywhere in the world.
The small size of the country, historical and cultural ties to ranching, and low population led to an industry defined by relatively scattered production of grass-fed beef rather than grain-fed, industrialized beef production. Though these conditions don’t allow for intensification, Uruguay fully embraced this limitation and turned it into a valuable asset. Due to the increasingly global and competitive market as well as the cultural significance of beef, the Uruguayan government placed a vested interest in the sector, which allowed for effective branding, widespread investment in pastureland, and rapid, sector-wide responses to calamities.
The Uruguayan government learned the necessity of proactively managing its high-end beef industry after weathering disaster. In 2001 an epidemic of Foot and Mouth Diseases (FMD) wiped out 6,900 animals. This came not long after Uruguay had worked hard to achieve the coveted “FMD Free Without Vaccination” status from the World Organization for Animal Health (OIE). All beef-exporting countries seek to obtain the “FMD Free Without Vaccination” status from OIE because it guarantees access to high-value markets such as in North America. But this is a gamble; a small outbreak in a neighboring country or one part of the country could spell disaster, as it did in 2001. (Uruguay still doesn’t hold this status.)
Authorities acted quickly and abated what would have turned out to be a disastrous outcome by implementing stringent laws on how beef production is managed. This paved the way for the adoption of an advanced tracking technology to better monitor and react to disasters. Since 2006, Uruguay has one of the most sophisticated supply chain tracing technologies in the world. Every calf raised in Uruguay is electronically tagged, and every player in the beef value chain player is obligated to subscribe to this system by law. This technology allows both consumers and authorities, home and abroad, to pin every morsel of meat to a particular animal and a particular lot. It also helps the authorities to check and audit the movement of all cattle across lots and slaughterhouses and acts as a central repository of information by which transparency is established and quality certifications are carried out.
Today, access to some of the highest-value markets for any food products comes from organic certification, a distinction created in various countries during the 1990s. In the United States, for example, the Organic Foods Production Act of 1990 authorized the creation of a National Organic Program (NOP) to consolidate fragmented organic state-by-state regulation dating back to the 1970s. By 2000, the NOP was finally established. In principle, organic certification aims to indicate which food products are safe, nutritious, and environmentally friendly. However, for individual cattle producers, obtaining a USDA organic certification could take up to three years and thousands of dollars in fees. Uruguayan beef, which markets itself as high-quality, wanted the international recognition, but organic certifications were simply too expensive and time-consuming to implement industry-wide.
As an alternative, Uruguay expedited the process by introducing the Certified Natural Meat Program, launched in 2001, in which voluntary ranchers and packers certify their produce to meet phytosanitary, quality and environmental standards according to a protocol administered by the National Meat Institute (INAC). Accreditation is carried out by international certifying firms.
This country-wide process not only allows its farmers access to high-end, international markets, but also functions as its own form of branding. Uruguay markets its beef as “Uruguay Certified Natural,” which in 2004 the USDA announced was “Process Verified,” essentially giving Uruguay’s certification an international stamp of legitimacy. “Natural” means that the cattle from which the beef comes is not injected with antibiotics or growth hormones and exclusively eats grass. In the beef market, grass-fed is valued highly for being tastier and healthier than its grain-fed equivalent.
Comprising only 3 to 6 percent of the total demand for beef in the US, grass-fed beef is certainly a niche market, but it’s expanding rapidly. Forbes has estimated that the market has grown by 25 to 30 percent each year for the past decade.
Uruguayan beef’s certification scheme and sophisticated production and supply chain management system also allows preferred access to fill European quotas for high-quality beef and access to new North American certifications. Uruguay is one of a handful of nations covered under two EU tariff quotas for premium beef, Quota 418 and the “Hilton” quota, and the first non-US country to hold the USDA’s “Never Ever 3” certification. The “Never Ever 3” certification indicates that the cattle were never given antibiotics, hormones, or animal protein; this status gives Uruguayan beef a new niche that it currently can monopolize in the US market. European quotas allow select countries to export their high-quality product to the EU duty free. This immense advantage over competitors makes Uruguay’s product only more desirable. Uruguay's aggressive reforms ensure that the country stays ahead of the competition and that it can capitalize on the quota and certification systems created by high-end Western markets.
These certifications play an important role in establishing brand value in this rapidly growing market. According to Quarterra, an agricultural consulting firm based in Argentina, while the term “natural” itself may not mean much legally speaking, “for the customer to 'buy' the concept of grass-fed beef from a certain place they need to associate the region with large tracts of grassland,” and Uruguay holds a comparative advantage in this front thanks to its well-reserved green pastures. In fact, Quarterra attributes much of Uruguay's success to effective marketing strategy as opposed to an “inherent difference in product quality.” According to Uruguay’s INAC, however, there is still a fundamental difference between Uruguayan and Brazilian beef: Uruguay’s beef comes almost entirely of English Hereford and Angus breeds while most of Brazil’s are from Zebu variety.
Even the use of the name “Uruguay” itself is an additional form of branding known as Geographic Indications (GI). Widely used in the EU to market products unique to a country or region, these indications can convey quality and give a country a monopoly on the product sold. Uruguay’s universal regulations on its beef industry allow the country to use this form of branding to the benefit of all its beef producers.
However, as environmental concerns become more pressing for consumers, some believe that the Uruguayan ‘brand’ may become tarnished due to the questions raised about the environmental sustainability of grass-fed beef, which requires a great deal more land than grain-fed beef. In fact, 80 percent of greenhouse gas (GHG) emissions from Uruguay come from cattle. Professor Walter Baethgen, Senior Research Scientist and Director of Regional and Sectoral Research at Columbia University’s International Research for Climate and Society and a native of Uruguay, downplays isolated GHG measurements: “If one looks at the carbon footprint of a kilo of beef produced in a feedlot, it is lower than a kilo produced in a natural grassland, but there is a lot of things that are happening such as water contamination and animal welfare issues in feedlots.” Baethgen believes that measuring the integrated environmental impact of cattle production, including the important role grasslands play in preserving biodiversity is where the focus ought to be. Fortunately, Uruguay is one of the few countries in the world where both the farmers and the environmentalists agree on preserving the natural grasslands.
Uruguay is a small country, and its excellence in beef production and marketing represents the exception for small countries rather than the norm. Uruguay’s investment in cutting-edge technology, strict adherence quality control and marketing, however, is relevant to nations with historical ties to one particular product that rely heavily on niche markets.
The South American country is not alone in pursuing a strategy that is highly adapted to its unique situation. Cuban hand-rolled cigars have become synonymous with luxury and wealth worldwide, and the small island nation has relied heavily on its rolled tobacco exports for its for it foreign currency earnings. Similarly, Latvia has established itself as one of the leading exporters of wood pellets and wood to the European Union owing to significant (over 50 percent of total land) timber coverage, slow population growth, and aggressive protection of forests by government. Uruguay’s example, along with Cuba’s and Latvia’s, suggests that specialization is a strong strategy for small countries to compete globally with sector giants.
Uruguay is now the second-largest exporter of beef to China, surpassing Australia. This is a huge shift for Uruguay considering that Europe used to hold that position only three years ago. While the underlying cause of this shift is demand from burgeoning middle-class in China that are increasingly seeking out grass-fed beef, Uruguay’s quick response to this demand is largely attributable to its small and highly integrated supply chain. Niche industries in smaller countries, it would seem, are much more adaptable.
This adaptation is critical to Uruguay’s success, as it must consistently comply with the evolving tastes and requirements of its old and new buyers. So far, Uruguay’s prescience continues as the USDA has proposed a stricter regulation to amend existing guidelines for how organic certified livestock producers raise their cattle. Key provisions include minimum indoor and outdoor requirements, physical alterations allowed, and treatment of cattle during transport and slaughter. For Uruguayan beef exporters that are already a few steps ahead of the pack in this front, this represents a great marketing opportunity.
Diversifying the destination of Uruguay’s beef exports will be the important next step in solidifying its global prominence. The niche markets filled by Uruguayan beef could quickly disappear if its purchasing markets face an economic downturn. Fortunately, Uruguay’s movement east has mitigated this danger and ensures continued success into the future.
Receive our research in your inbox
Thank you for subscribing to our newsletter!
What Information Do We Collect?
The information we gather enables us to personalize, improve and continue to operate the Services. We collect the following types of information from our users.
IP Address Information and Other Information Collected Automatically:
· We automatically receive and record information from your web browser when you interact with the Services, including your IP address and cookie information. This information is used for fighting spam/malware and also to facilitate collection of data concerning your interaction with the Services (e.g., what links you have clicked on).
· Generally, the Services automatically collect usage information, such as the number and frequency of visitors to the Site. We may use this data in aggregate form, that is, as a statistical measure, but not in a manner that would identify you personally. This type of aggregate data enables us and third parties authorized by us to figure out how often individuals use parts of the Services so that we can analyze and improve them.
Information Collected Using Cookies:
· Most browsers have an option for turning off the cookie feature, which will prevent your browser from accepting new cookies, as well as (depending on the sophistication of your browser software) allowing you to decide on acceptance of each new cookie in a variety of ways.
We collect statistical information about how users collectively use the Services (“Aggregate Information”). Some of this information may be derived from Personal Information. This statistical information is not Personal Information and cannot be tied back to you or your web browser.
How, and With Whom, Is My Information Shared?
IP Address Information:
Information You Elect to Share:
We share Aggregate Information with our partners, service providers and other persons with whom we conduct business. We share this type of statistical data so that our partners can understand how and how often people use our Services and their services or websites, which facilitates improving both their services and how our Services interface with them. In addition, these third parties may share with us non-private, aggregated or otherwise non Personal Information about you that they have independently developed or acquired.
Information Shared with Our Agents:
We employ and contract with people and other entities that perform certain tasks on our behalf and who are under our control (our “Agents”). We may need to share Personal Information with our Agents in order to provide products or services to you. Unless we tell you differently, our Agents do not have any right to use Personal Information or other information we share with them beyond what is necessary to assist us. You hereby consent to our sharing of Personal Information with our Agents.
Information Disclosed Pursuant to Business Transfers:
In some cases, we may choose to buy or sell assets. In these types of transactions, user information is typically one of the transferred business assets. Moreover, if we, or substantially all of our assets, were acquired, or if we go out of business or enter bankruptcy, user information would be one of the assets that is transferred or acquired by a third party. You acknowledge that such transfers may occur, and that any acquirer of us or our assets may continue to use your Personal Information as set forth in this policy.
Information Disclosed for Our Protection and the Protection of Others:
Information We Share With Your Consent:
Except as set forth above, you will be notified when your Personal Information may be shared with third parties, and will be able to prevent the sharing of this information.
Is Information About Me Secure?
We store all of our information, including your IP address information, using industry-standard techniques. We do not guarantee or warrant that such techniques will prevent unauthorized access to information about you that we store, Personal Information or otherwise.
What Information of Mine Can I Access?
You can access and delete cookies through your web browser settings.
California Privacy Rights: Under California Civil Code sections 1798.83-1798.84, California residents are entitled to ask us for a notice identifying the categories of personal customer information which we share with our affiliates and/or third parties for marketing purposes, and providing contact information for such affiliates and/or third parties. If you are a California resident and would like a copy of this notice, please submit a written request to the following address: 12 E 49th Street, 11th Floor, New York, NY 10017
What If I Have Questions or Concerns?
If you have any questions or concerns regarding privacy using the Services, please send us a detailed message to email@example.com. We will make every effort to resolve your concerns.
Effective Date: March 11, 2014
b. You shall not (directly or indirectly):i. take any action that imposes or may impose (as determined by us in our sole discretion) an unreasonable or disproportionately large load on our (or our third party providers’) infrastructure;ii. interfere or attempt to interfere with the proper working of the Services or any activities conducted on the Services;iii. bypass, circumvent or attempt to bypass or circumvent any measures we may use to prevent or restrict access to the Services (or other accounts, computer systems or networks connected to the Services);iv. use manual or automated software, devices, or other processes to “crawl” or “spider” any page of the Site;
v. harvest or scrape any Content from the Services;
vi. otherwise take any action in violation of our guidelines and policies;vii. decipher, decompile, disassemble, reverse engineer or otherwise attempt to derive any source code or underlying ideas or algorithms of any part of the Services (including without limitation any application), except to the limited extent applicable laws specifically prohibit such restriction;viii. modify, translate, or otherwise create derivative works of any part of the Services; orix. copy, rent, lease, distribute, or otherwise transfer any of the rights that you receive hereunder.c. We also reserve the right to access, read, preserve, and disclose any information as we reasonably believe is necessary to:i. satisfy any applicable law, regulation, legal process or governmental request;ii. enforce these Terms of Service, including investigation of potential violations hereof;
iii. detect, prevent, or otherwise address fraud, security or technical issues;
iv. respond to user support requests; or
v. protect the rights, property or safety of us, our users and the public.4. Third Party Services. The Services may permit you to link to other websites, services or resources on the Internet, and other websites, services or resources may contain links to the Services. When you access third party resources on the Internet, you do so at your own risk. These other resources are not under our control, and you acknowledge that we are not responsible or liable for the content, functions, accuracy, legality, appropriateness or any other aspect of such websites or resources. The inclusion of any such link does not imply our endorsement or any association between us and their operators. You further acknowledge and agree that we shall not be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any such content, goods or services available on or through any such website or resource.5. Termination. We may terminate your access to all or any part of the Services at any time, with or without cause, with or without notice, effective immediately. All provisions of these Terms of Service which by their nature should survive termination shall survive termination, including, without limitation, ownership provisions, warranty disclaimers, indemnity and limitations of liability.6. Warranty Disclaimer.a. You release us from all liability for you having acquired or not acquired Content through the Services. We make no representations concerning any Content contained in or accessed through the Services, and we will not be responsible or liable for the accuracy, copyright compliance, or legality of material or Content contained in or accessed through the Services.b. THE SERVICES AND CONTENT ARE PROVIDED “AS IS”, “AS AVAILABLE” AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTIES IMPLIED BY ANY COURSE OF PERFORMANCE OR USAGE OF TRADE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED. WE, AND OUR DIRECTORS, EMPLOYEES, AGENTS, SUPPLIERS, PARTNERS AND CONTENT PROVIDERS DO NOT WARRANT THAT: (I) THE SERVICES WILL BE SECURE OR AVAILABLE AT ANY PARTICULAR TIME OR LOCATION; (II) ANY DEFECTS OR ERRORS WILL BE CORRECTED; (III) ANY CONTENT AVAILABLE AT OR THROUGH THE SERVICES IS FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS; OR (IV) THE RESULTS OF USING THE SERVICES WILL MEET YOUR REQUIREMENTS.7. Limitation of Liability. IN NO EVENT SHALL WE, NOR OUR DIRECTORS, EMPLOYEES, AGENTS, PARTNERS, SUPPLIERS OR CONTENT PROVIDERS, BE LIABLE UNDER CONTRACT, TORT, STRICT LIABILITY, NEGLIGENCE OR ANY OTHER LEGAL OR EQUITABLE THEORY WITH RESPECT TO THE SERVICES FOR ANY (I) LOST PROFITS, DATA LOSS, COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, COMPENSATORY OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER, SUBSTITUTE GOODS OR SERVICES (HOWEVER ARISING), (II) BUGS, VIRUSES, TROJAN HORSES, OR THE LIKE (REGARDLESS OF THE SOURCE OF ORIGINATION), OR (III) DIRECT DAMAGES IN EXCESS OF $50.00.8. Governing Law and Jurisdiction. These Terms of Service shall be governed by and construed in accordance with the laws of the State of New York, including its conflicts of law rules, and the United States of America. You agree that any dispute arising from or relating to the subject matter of these Terms of Service shall be governed by the exclusive jurisdiction and venue of the state and Federal courts of New York County, New York.9. Miscellaneous.a. Modification. We reserve the right, in our sole discretion, to modify or replace any of these Terms of Service, or change, suspend, or discontinue the Services at any time. Your continued use of the Services following notification of any changes to these Terms of Service constitutes acceptance of those changes.b. Entire Agreement and Severability. These Terms of Service are the entire agreement between you and us with respect to the Services, including use of the Site, and supersede all prior or contemporaneous communications and proposals (whether oral, written or electronic) between you and us with respect to the Services. If any provision of these Terms of Service is found to be unenforceable or invalid, that provision will be limited or eliminated to the minimum extent necessary so that these Terms of Service will otherwise remain in full force and effect and enforceable. The failure of either party to exercise in any respect any right provided for herein shall not be deemed a waiver of any further rights hereunderc. Force Majeure. We shall not be liable for any failure to perform our obligations hereunder where such failure results from any cause beyond our reasonable control, including, without limitation, mechanical, electronic or communications failure or degradation.d. Assignment. These Terms of Service are personal to you, and are not assignable, transferable or sublicensable by you except with our prior written consent. We may assign, transfer or delegate any of our rights and obligations hereunder without consent.e. Agency. No agency, partnership, joint venture, or employment relationship is created as a result of these Terms of Service and neither party has any authority of any kind to bind the other in any respect.f. Notices. Unless otherwise specified in these Term of Service, all notices under these Terms of Service will be in writing and will be deemed to have been duly given when received, if personally delivered or sent by certified or registered mail, return receipt requested; when receipt is electronically confirmed, if transmitted by facsimile or e-mail; or the day after it is sent, if sent for next day delivery by recognized overnight delivery service. Electronic notices should be sent to firstname.lastname@example.org. No Waiver. Our failure to enforce any part of these Terms of Service shall not constitute a waiver of our right to later enforce that or any other part of these Terms of Service. Waiver of compliance in any particular instance does not mean that we will waive compliance in the future. In order for any waiver of compliance with these Terms of Service to be binding, we must provide you with written notice of such waiver through one of our authorized representatives.h. Headings. The section and paragraph headings in these Terms of Service are for convenience only and shall not affect their interpretation.Contact. You may contact us at the following address: 12 E 49th Street, 11th Floor, New York, NY 10017.