February 17, 2012

Argentina's 2011 cattle slaughter hits 20-year low

Argentina's cattle slaughter dipped 8.7% on-year to 10.8 million head in 2011, the lowest in 20 years as ranchers rebuilt herds decimated by a severe drought in 2009.

The decreased production led to a drop in exports to 156,552 tonnes, down 18.4% on-year and down 62.7% from 2009, the Argentine beef chamber Ciccra said. Those exports were valued at almost US$1.3 billion, up 6.7% on the year, but down 23.4% from 2009. In December, the average export price was US$9,418 per tonne.

Argentine beef production dropped sharply over the past two years due to the drought and government price controls that led many ranchers to give up and turn their fields over to grain.

The nation was the world's No. 4 beef exporter in 2009 but now barely ranks in the top 10. However, higher local prices have fuelled resurgence. Production is expected to rebound this year, although not reaching pre-2009 levels of 3.4 million tonnes until 2014, according to Ciccra.

While a dry December stoked worries that the recovery would be set back, ranchers are holding back breeding females at the highest rate in over 20 years and recent showers have dissipated the drought fears.

Just over 39% of the animals slaughtered in 2011 were female. Anything under 43.5% marks a building of herd sizes, according to Ciccra.

Argentines are among the world's top beef eaters, but the tight supplies and high prices last year saw them cut back. Average consumption last year was 55.5 kilograms per person, down 3.7% on the year and down 19.3% from the record levels set in 2007, according to Ciccra. In addition to the fading effects from the 2009 drought, the government is on a big push to jack up beef production.

The government is looking for a 70% increase between now and 2020, through greater use of feedlots. In a feedlot, cattle are penned for the final months of their lives, and fattened on feed to maximise weight.

Just a few years ago, the lots were a fledgling industry in Argentina, but now they produce about half of the country's beef, according to the Argentine Feedlot Chamber.