Argentine beef supplies plunge in April

Argentina's April beef production declined 12% on the previous month and was 31% down year-on-year, at 198,000 tonnes cwt - the lowest level since the March 2008's agricultural strike.

The very tight supply of cattle has been reflected in soaring cattle prices, to the highest level among the South American region, reaching US¢180/kg lwt for light steer categories, according to reports.

The low cattle availability is a result of the severe drought experienced during the 2008-09 season, combined with the industry controls implemented by the local government since 2005. This has resulted in a number of cattle producers liquidating herds and exiting the industry in favour of other more profitable agricultural options.

Argentine beef exports in April slumped 60% when compared to March and 75% year-on-year, to 6,836 tonnes swt. The slump in exports is the result of the limited issuing of export certificates by the government, in order to retain beef stocks in the domestic market, in addition to the closure of a number of plants given the current low capacity utilisation.

However, despite the government's efforts to encourage packers to supply beef to the domestic market through a number of controls and incentives, domestic beef consumption has fallen 20% during the first four months of 2010, to an estimated 56kg/head when compared to the same period in 2009.