July 18, 2007

 

Uruguay's beef production and exports declines sharply

 

 

A series of factors are driving down Uruguay's beef production, the director of economic studies for the Uruguayan meat institute, Paulo Caputi, said Tuesday (Jul 17).

 

These factors include high grain prices, rising property values and increased tree-farm cultivation, he said.

 

Exports are also on the way down due to growing domestic demand. Uruguay's growing beef consumption, at 53 kilogrammes per person per year currently, is second only to Argentina's 65 kilogrammes per year.

 

Uruguay's beef exports fell 20 percent to 210,000 tonnes during the first half of 2007 compared with the same period a year earlier, Caputi told Dow Jones Newswires.

 

However, the drop is expected to be mitigated in the second half of the year, with exports ending just 15 percent lower than in 2006.

 

The current drop was also partly due to unusually high exports last year, Caputi said. 

 

Uruguay's beef exports surged last year, as high beef prices and reduced exports from Argentina prompted more farmers to sell off their cattle herds, Caputi said.

 

Argentina banned beef exports for a brief period last year to cut inflation. It is currently cutting exports to 70 percent of previous levels.

 

More than 1.2 million hectares in Argentina slated for cattle raising has been converted into grain production, while another million would be added this year, according to Agripac Consultores.

 

Meanwhile Uruguay's ranchers are also shifting from cattle raising to grain production, dairy production or forestry cultivation, Caputi said.

 

Uruguayan ranchers have in the past chosen to raise cattle due to cheap pasture available, but rising farm property values are putting pressure on them , according to Caputi.