Beef slaughter levels in Argentina drops while the government closed on beef exports resulting in a two-day beef trade strike on Thursday (Apr 29) by the local butchers union and farm groups to protest layoffs and reduced shifts.

After the strikes, President Cristina Fernandez was forced to revoke a tax increase on soy exports but farmers are further demanding the government to lower the 35% export tax on soy, eliminate the export tax on all other grains and free up the beef exports.

The government has been holding up some beef exports since December and tightened those restrictions in March as prices continued to soar. The government regularly shuts down or limits beef exports when prices rise in an attempt to increase domestic supply and bring down the cost to local consumers.

The government has used the export snags as leverage to pressure beef exporters to sell beef to the local supermarkets well under market value. The cheap meat was seen in a number of supermarkets this week after exporters agreed to the price settlement, according to local press reports.

The price of beef has shot up in recent months, angering residents in this country with one of the highest per-capita beef consumption rates in the world. Those gains have helped to stoke broader inflation at alarming levels.

Argentina's 2010 budget estimated the CPI would rise 6.5% this year, but through the end of March, 12-month inflation was running at 9.7% per year, according to the government's statistics institute, Indec.

The price of beef has surged because of a drought last year and due to the government's intervention in cattle markets since 2006. This spurred ranchers to trim herds in favour of alternative, more-profitable pursuits such as soy. The herd trimming resulted in production of 3.54 million tonnes of beef last year, up 10% from the previous record.