May 29, 2009

The Argentinean Beef Industry and Trade Association (CICCRA), the Argentinean Rural Confederation (CRA) and local analysts expect the country's beef supply to fall from 2010 onwards.

CRA stated that Argentina will need to import beef from 2011, while CICCRA forecasts high beef price increases at domestic wholesale and retail level will lead to a fall in annual consumption from the current 70kg/head to 55kg/head.

CICCRA said production will be reduced in the medium term due to a shrinking herd, increased slaughter of female cattle, and the government's support for shortfed product for the domestic market, which has led to an increase in young cattle slaughter.

Argentina's cattle herd was shrinking due to record slaughter levels and the lack of government support for breeding and restocking activities, as well as controls in the supply chain and export restrictions. While cow slaughter boosted production in the short term, calf output in the medium term has been jeopardised.

Meanwhile, cattle pregnancy and birth rates have started decreasing as the cow herd is in poor condition following the severe drought that has affected Argentina's central and northern regions since mid 2008.