MONTEVIDEO, URUGUAY — Uruguay’s corn production is expected to hit a record 1.8 million tonnes in 2025-26 but the nation’s wheat totals will drop as canola is expected to rebound significantly. 

Projections for the coming crop season show canola returns 70% to 80% higher than wheat and 50% to 60% higher than barley, according to an April report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture. Canola area is expected to increase 80,000 to 100,000 hectares from last season, while wheat area is expected to drop by 300,000 hectares, or nearly 17%, from the previous year. 

Corn, however, will benefit from projected better returns than soybeans and a recovery in area after a strong attack of corn stunt disease, the FAS said. 

“Early weather forecasts indicate that the dry conditions of La Niña of the past three growing seasons would probably not be present, benefiting corn production,” the FAS said. 

More than 90% of Uruguay’s area, or 16.4 million hectares, is suitable for agricultural activity, according to a report from Uruguay XXI, an agency responsible for the promotion of exports, investments and country image. Agriculture’s share of the gross domestic product hovers between 6% and 7% and increases to 14% to 16% when including associated subsectors and industries. The agricultural sector accounted for about 8% of the country’s employed population in 2023.

The nation is a key exporter of agricultural goods in South America, with more than 80% of its total exports consisting of agricultural-based products that are destined to more than 160 countries. It is a top producer and exporter of corn, wheat, soybeans, barley, rice and malt. 

Agribusiness exports overall decreased in 2023, according to Uruguay XXI, due to drought-related problems in summers crops and lower prices. Key export partners include Brazil at $861 million in 2023, with increases in malt, rice and wheat, followed by the EU at $372 million, with increases in rapeseed, rice and soybeans. 

“With a population of 3.5 million inhabitants, the country’s exports can supply nearly 30 million people worldwide,” said Uruguay XXI.

Crop production

Along with increasing production, domestic corn consumption in 2025-26 is estimated to increase to 1.55 million tonnes, the highest ever, the FAS said. 

“The use of corn has been growing in the past years as a result of a strong livestock business, which is consuming more corn for finishing beef cattle and to feed a growing number of calves that are exported alive,” the FAS said. 

The local dairy sector also is rebounding after a few years of lower production due to weaker world milk powder prices. Corn production by the local poultry industry also has been growing along with the growth in slaughter and broiler production. 

“The balanced feed industry has also been expanding in recent years, reflecting a generalized larger use of corn in the different livestock industries,” the FAS said.

Corn exports in 2025-26 are estimated at 200,000 tonnes, similar to last season and one of the highest ever. The increased production beyond domestic needs will encourage the shipment of a potential surplus in order to keep a balanced domestic market, the FAS said. Main destinations likely would be Chile as well as some southeast Asian and Middle East countries.

Wheat production in 2025-26 is forecast at 1.2 million tonnes, a significant drop from the past two crop seasons because farmers are expected to reduce planting area, the FAS said. In 2024-25, wheat production was estimated at 1.5 million tonnes. 

Production has improved in the last several years due to a seed improvement program adapted to the country’s environment, higher technology and improved crop management, the FAS said. 

“Uruguay’s wheat production is lately achieving higher yields and improved quality, opening the opportunity to reach a greater number of export markets,” the FAS said.

Domestic consumption in 2025-26 is projected at 500,000 tonnes, in line with the last few years but lower than 2024-25. The use of wheat for local milling and seed use is stable at about 450,000 tonnes per year. 

Exports are estimated at 750,000 tonnes, lower than in the past two marketing years because of an expected smaller output, the FAS said. Uruguayan wheat is reaching more and newer markets, moving away from being totally Brazil-dependent, it said. The government is in negotiations with China and Mexico to be able to export wheat to them. 

Five trading companies accounted for almost 90% of exports during November 2023-October 2024. Wheat flour exports during this same period totaled 15,900 tonnes, with practically all destined to Brazil, the FAS said. 

Imports of wheat products are mostly pasta and flour that come from Argentina, Brazil and Italy. 

Oilseed growth

Since the 2003-04 season, soybeans have been the leading summer crop in Uruguay. Production in 2025-26 is forecast at 3.1 million tonnes, a slight drop from the previous year’s record harvest of 3.2 million tonnes, but still 4% higher than earlier years, the FAS said. The drop is due to a modest reduction in planted area as farmers shift some acreage back to corn. Producers were encouraged by the record yields in 2024-25 and view soy as a lower-risk option, the FAS said. 

“Soybeans are widely regarded as the most manageable summer crop in Uruguay, requiring fewer interventions, less expensive seed and consistently strong export demand,” the FAS said. 

Domestic crushing is limited, with just less than 10% of total production processed locally, primarily at a single large facility. A bulk of Uruguay’s soybean production, about 2.9 million tonnes in 2025-26, is exported mostly to China. 

Because its production costs are higher than neighboring countries and its exports are significant, producers are highly exposed to international price fluctuations, the FAS said. 

China took nearly 80% of Uruguay’s soybean exports in 2024 with China’s preference for whole soybeans for domestic crush driving the trade, it said. Other markets have gained importance, including Argentina, which became the second largest export market in 2024, increasing more than 800% year over year. 

“These flows were driven by Argentina’s substantial crushing capacity and a period of low domestic soybean sales, as Argentine producers delayed marketing their crop in anticipation of changes to export taxes, exchange rate movements, or more favorable prices,” the FAS said, adding that in 2025-26, exports to Argentina are expected to normalize. 

Additional export growth is expected in markets such as Egypt, Malaysia and the European Union. Egypt re-emerged as Uruguay’s third-largest market in 2024 but only accounted for 4% of total exports. Egyptian traders are potentially interested in replacing Brazilian imports due to improved pricing and availability.

Although soybeans are the leading crop, canola has seen the most recent growth within the agriculture sector. After two decades of reduced plantings, the crop started seeing successive increases in total cultivated area, Uruguay XXI said. The oilseed is grown in the winter in Uruguay and its value is derived from the oil it produces. 

The boom was aimed at the domestic market for the production of biofuels and to a lesser extent for human consumption, Uruguay XXI said. Since 2017, the external market began to grow with exports to France, Belgium, Germany and the UK. 

“Europe is a high-value market, but imposes important requirements related to product safety,” Uruguay XXI said. “To avoid shipment rejections, grains must not contain agrochemical residues that exceed the maximum set limits.”

Weather problems and a drop in prices caused planted area to contract in the 2023-24 season. However, in 2024-25, canola was the only profitable crop with good yields at high prices, the FAS said. Planting for the 2025-26 season started in May and an additional 80,000 to 100,000 hectares are expected to be sown with canola, the FAS said.