October 22, 2007

Rising grain costs pressuring Argentina's feedlot

High grain costs are currently challenging Argentina's cattle feedlot with production costs reaching the same level on grainfed cattle prices, according to Meat and Livestock Australia (MLA).

Currently, Argentine feeding and operative feedlot costs are around 104 cents per gained kilo, almost the same amount that processors are paying for finished animals. The total value of soy and corn subsidies is around 60 cents head/day, approximately A$52 (US$46.20) per finished animal, taking into account a 90 day feedlot period.

The Argentine government, through the Agricultural Trade Control Office (ONCCA) is currently subsidising feedlots with 3 kilograms per head per day of soy and 6 kg/head per day of corn to increase per head production. However, producers would prefer to eliminate all controls such as price caps and export restrictions along with subsidies, in order to release pressure from the industry and make it profitable.