September 28, 2005

Argentine meat trade set to increase

As one of the largest beef producers and exporters in the world, Argentina is well placed to continue as one of the most reliable suppliers of premium beef to world markets, with the possibility of eventually superseding New Zealand in beef export volume, said a local meat trade expert Pablo Kiryluk.

Kiryluk cited calculated policy changes and aggressive marketing as instrumental in putting Argentina back in the beef export business, after years of stagnation.

In 2002, Argentine beef plants processed 2.7 million tonnes of beef and 2.8 million tonnes in 2003. Beef exports increased to 384,000 tonnes in 2003, jumping to 420,000 tonnes in 2004.

According to the National Food Service of Health and Quality (SENASA), Argentine beef exports reached US$254 million in the first quarter of 2005-a 40 percent jump compared with beef exports in the first quarter of 2004.

The main destinations for Argentine beef are the European Union, followed by Russia, Algeria, Israel, and Bulgaria. Increased market liberalisation under MERCOSUR-a trade agreement between Argentina, Brazil, Paraguay, and Uruguay-also helped expand sales to neighbouring Brazil.

Elsewhere in the region, Argentina is supplying approximately 80 percent of Chile's beef imports.

The successful eradication of foot-and-mouth disease among Argentine cattle has also opened the door for Argentine beef exports to the rapidly growing markets of Asia. Argentina could possibly compete better in Pacific Rim markets by shifting production toward grain-fed beef, because large supplies of FMD-free, grass-fed beef already exist in Australia and New Zealand.

As such, Kiryluk predicted that Argentina will expand its markets outside of the European Union. China recently opened its markets to Argentine beef, and experts anticipate that the United States will reopen its market to fresh and chilled beef as early as next year.

Even as Argentina is keen to supply the export market with high-quality beef, it must also work to meet the needs of growing domestic demand, said Kiryluk.  Annual per capita consumption of beef among Argentineans is at an average of 66 kg. The country thus has to expand its ranching and processing capacity to meet the demands of both markets. A total traceability programme, currently being planned, will improve consumer confidence in beef safety.

The major challenge that the Argentinean beef industry will face during the next few years is increasing beef production to supply the domestic and export markets, say experts, who are equally convinced that the industry is capable of adequately supplying both markets.