Why is the Osorno region in CHILE home to so much dairy farming?

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Why?  Well, thanks to the high level of sanitary control, dairy cooperatives produce the milk of high quality. The Chilean dairy industry benefits from a suitable climate (around 1200m plus with moderate temperatures), particularly in the Southern half of the country (the regions of Los Lagos and Los Rios)  having around 75% of the cattle and 600.000 hectares devoted to dairy production (80% of the country).*

Key facts about the Chilean dairy industry

  • Chile is involved in up to 5% of milk production in Latin America,
  • The production of the dairy sector represents 6% of agricultural GDP and 33% of the GDP of livestock farming,
  • The volume of milk production is about 2450 million litres and growing fast,
  • 491 500 dairy cows which are 14.2% of the national cattle,
  • 98 000 dairy farms,
  • 895.73 million litres of collected milk in 2010, more than +39.61% compared to 1995.

Chile offers strong guarantees for foreign investors. Thanks to its economic stability and monetary discipline, Chile is considered the Latin American country with the least investment risk and high competitiveness. The country is recognized as the most dynamic developing economy in the area (rate of GDP Growth 2011: 5.8% (estimated) source IMF) and takes advantage of modern transportation infrastructures. Furthermore, Chile is a strategic platform for export, as its many free trade agreements with other countries show (Free trade agreements with several major economies, including the European Union, the United States, China and South Korea.).

Many dairy farms thrive in this region; the most obvious is the vast Manuka dairy farm and Chilterra.

What is the Manuka dairy farm? This is a series of dairy farms near the lake district town of Osorno. There are nearly 28,000 plus milking cows on around 30,000 ha of lush farmland. The intention is to take this up to closer to 45,000 milking cows over the next few years. Although owned by New Zealanders, it is run by local Chileans.  It employs around 350 people and is the largest dairy farm in Chile. Sadly instead of setting a good example of animal husbandry, it has more recently been associated with animal cruelty, resulting in the prosecution of New Zealander Zachary Reuben Ward for alleged crimes relating to the mistreatment of animals.

The Chilean company, Chilterra, owns and operates nine dairy farms on 1091 hectares plus and a further 3144 hectares of dairy support land. The six dairy farms are fully developed and currently support 3300 cows. It is a joint Chilean/New Zealand enterprise with technical expertise provided by Kiwi investors for the Kiwi pastoral farming system practised. The company is managed by Chilean business partners and governed by directors from both countries.

The CEO is a Chilean, Ricardo Rios, and its chairman is a New Zealander, Mike McBeath. It employed around 140 people. ( this farm has failed financially and is under administration  ). It is the second-largest dairy farm operation in Chile, so its failure will have deep repercussions.

Many other medium-sized dairy farms milk up to  1500  cows in the area.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.


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