Leonardo Rafael, head of the Argentine Chamber of Slaughterers and Suppliers, assured Ámbito that “slight increases had been registered last week, but last Friday the standing farm jumped 25%, always considering the quality of the lots. This Tuesday we again exceeded the values of Friday. This causes an increase of between $300 to $400 to be noticed on the counter”.
Impact on the gondolas
Regarding the prices in the gondola, Miguel Schiariti, president of the Chamber of Industry and Commerce of Meat (CICCRA), pointed out in dialogue with Ámbito that “in future we must see if this increase is validated in the gondolas, there we will see what is the reaction of consumers”. It is that butcher shops increased their sales in recent months because meat did not keep up with the rise of other foods. If now the price of beef increases, it is likely that the buyer will stop opting for that animal protein and turn to other alternative meats.
In the sector they consider that the recomposition of the value of the farm on foot was not only something to be expected but rather something necessary for the entire chain, especially for those who are dedicated to fattening. Juan Eiras, a benchmark for this activity, told this medium that “with the seasonal supply exhausted and then the reinforcement of the treasury towards fattening that the dry season generated, a price recomposition had to come. What happened in the last days is the beginning of the recovery of the 70% delay that the treasury had against the CPI.”
According to Eiras, the feedlots had been suffering from the increase in the cost of food that began a year ago with the war between Russia and Ukraine. “Before that, corn cost $19,000 a ton and today it is between $50,000 and $60,000. Welcome to the recovery period, with reasonable values that make it possible to produce and sell a product profitably, because for the last six months we have been selling permanently below production cost”.
The increase in prices is a reality and there is no doubt that it will be a serious problem for the Government, since meat registered prices well below those of the rest of the foods and allowed the CPI to balance.
Change of trend
In this sense, Victor Tonelli, a livestock consultant with a long history, assured Ámbito that “these increases mark a change in trend, which has to do with well-finished light animals. I estimate that the supply will continue to be abundant until July, because although the rains have arrived, there is still no grass, therefore the forage supply will be scarce until spring.
Tonelli explained that the special and well-finished categories will continue to recover prices, but it is likely that in the production sector -although with a smaller gap- it will continue to lag behind inflation. “Today, to catch up with inflation, we should have a price of around $510 per kilo, but even with these increases we are at $400 with good quality.” Perhaps that is a valid indicator: for the business to be profitable for the primary sector, there is still a 25% adjustment in the price of the standing farm.
Source: Ambito
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