June 23, 2008

Argentina beef supplies is shrinking in international markets, including the lucrative EU trade, as the Argentine government strengthens export restrictions and farmers retaliate with a three-month strike.

Beef production has been disrupted by the on-and-off farmers strike, which blocks internal trade of all non-perishable products. Truck drivers have joined in the strike, causing a breakdown in transportation of cattle to slaughterhouses and supermarkets, which leads to low domestic retail meat supplies.

This may cause Argentina to export only about 200,000 tonnes cwt of beef products this year, compared to the 550,000 tonnes cwt agreed between the industry and the government back in April.

UK importers are upset by shipment delays and are demanding compliance with contracts. Argentina is expected to fall at least 3,000 tonnes short of filling its 28,000 tonnes of EU Hilton high quality beef quota, which would expire on June 31.

Brazilian meat processor JBS, which owns Argentina's largest meatpacker Swift Armour, is currently re-organising its marketing strategy from exports to supplying the domestic market.

In addition, heavy steer prices in Argentina have remained stable since April at around 225-230 US cents cwt.