Meanwhile, it is highlighted that the prices of beef cuts grew above these figures in the last year. Not a minor fact given that, as highlighted by the CEPA, meat consumption represents between 7% (in the GBA) and 13.3% (northeast) in the composition of the CPI.
According to the latest report prepared by the Chamber of Industry and Commerce of Meat and Derivatives (CICCRA), In May the price of the roast rose 5.5% monthly and the buttock climbed 5%. “In the other cases, the increases were greater than 6%”pointed out the study, in which it was highlighted: “Meanwhile, in May the price of whole chicken rose 8.3%a very significant variation, although more moderate than those verified in March and April (15.1% and 12.1% monthly, respectively)”.
“In the last twelve months, the prices of all meat cuts considered in the IPC-GBA increased at a rate higher than the general level, with the exception of frozen hamburgers. The price of the roast registered an annual increase of 62.2%, that of minced meat, 63.3%, that of the shoulder, 65.2%, that of the rump, 66.7%, and that of the buttock, 67.2%”, while, in the case of chicken, an interannual increase of 86% was registered, as indicated.
The increase in chicken is not a minor fact, since Currently – due to price issues – Argentines consume practically the same amount of beef as poultry. With this scenario, the increase in chicken hits even more the sectors with less purchasing power that precisely changed their diet for its lower value.
When analyzing the possible causes of these increases, from CEPA they mentioned one of the variables that are put forward by producers: one of them is the increase in corn prices.
“The price of meat is integrated, among others, by the cost of the cow, the cost of the calf and the corn feed. Therefore, they estimate that the incidence of corn in the cost of the Treasury would reach values close to 8% of the total cost. But despite these data, a close correlation is observed between the international price of corn and the price of young bulls. Indeed, although corn does not turn out to be the only cost in the formation of the price of meat over the counter, the truth is that it seems to operate as a reference value for determining the final price. In short, the increase in the price of corn can explain a small part of the increase in the price of beef”, they remarked from the consultant.
“It is different in the case of pig and poultry production, where the incidence of corn is greater. For the Cereal Exchange, corn represents 21% of the price (Careful Prices) of the whole chicken. According to the University of San Martín (UNSAM), a 10% increase in the price of corn results in an increase in the final price (without VAT) of almost 3% for chicken, 1.5% for pork and only 1 .25% in beef”, added the study. Other aspects that could have an impact on the rise of chicken are labor and freight costs.
Consumption
The inflationary scenario results in a low consumption of beef by Argentines: an indicator that is at historical lows. In fact, according to the CICCRA report, In May, the moving average of the last twelve months placed the apparent consumption of beef at 47.9 kilos per inhabitant per year.
Although it was 1.9% above the level registered in May 2021, “this is related to the atypical values of exports (high) and domestic consumption (very low) that were registered in May 2021 and that in this new measurement have already been left out, causing the average to recover”.
In fact, according to the study by the sector chamber, consumption is 8.6% below the same month in 2019 (prior to the pandemic) and has collapsed almost 32% since 2009.
Source: Ambito
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