According to the records of the Livestock Market of Rosario, the average values of steers and heifers marketed in the Liniers Market adjusted during April by 7.9% and 8.1% respectively, compared to the average values of March. In this way, April constitutes the third consecutive month in registering rises higher than the inflation rate.
The situation is very clearly illustrated by the livestock analyst Ignacio Iriarte: “Despite the fall in the real income of the population, the growing delay in the real exchange rate, the fact that the Government does everything it can to limit exports and despite the abundance and low relative price of beef substitutes, farm values in real terms are the highest in history. A very low supply of cattle is combined in relation to population growth –there are only 63 kilos available for consumption and export–, with international prices 40% higher than a year ago. Consumption is on the defensive, but its resistance to reducing intake below 45 to 48 kilos per year is expressed in the prices it pays for fat and for meat.”
In short, the bid between the internal and external markets exists and that is why there is a real need to increase the beef stock and national production. That is why the Government, more precisely the Secretary of Agriculture, recently launched the PlanGanar with which it seeks to increase production by 600,000 tons by 2030, a project with a long-term outlook that could help put an end to this bid, but In the immediate term, prices do not stop rising and that fully impacts consumption. According to the survey of the Institute for the Promotion of Argentine Beef (IPCVA), in March consumption was located at just 47.7 kg. per inhabitant per year, which marks a year-on-year drop of 2.7% (-1.3 kg/person/year), which rises to 12% when compared to 2019.
Argentines are eating less meat but Argentina is also exporting less due to the restrictions imposed by the Government to balance the balance towards the domestic market, something that in practice has not been a solution to placate prices either.
In this framework of maximum pressure in the sector, the exporting refrigerators, more precisely the Consorcio de Exportadores de Carnes Argentinas (ABC) reports that there have been significant drops in prices of the different bovine meat products that Argentina exports to the international market and that makes dent in its profitability.
“This situation has direct repercussions on the cost structure of the exporting refrigeration companies, who will adapt their production and marketing programs to the new reality that has been configured,” the exporters warn.
As explained by these companies that manage the meat export business in Argentina, “one of the most significant cases is the value of the Hilton quota, which was sold between US$17,900-18,000 and, at present, cannot be sell at more than u$s 15,000.Consequently, and proportionally to what happens with the quota of high quality cuts to the European Union, there were also significant changes in the values of Quota 481 that was marketed at u$ s11,000 and today it sells for $9,000.”
“The main destination for Argentine meat in volume, the People’s Republic of China, has also decreased its purchase values by $1,000 in a general average of the different products it imports. Among the reasons that have led to this drop, the current confinement by Covid-19 in the aforementioned country, the devaluation produced and the congestion of the port of Shanghai, which categorically complicates the logistics of disembarkation”, details the ABC Consortium.
The scenario is complex because if the fall in international values is sustained, exporters would press for a greater opening of meat exports, in a context in which the Government has practically no margin to contain values in the domestic market. And the story can get even more complicated.
Source: Ambito
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