November 1, 2007

Argentina's beef exports drop 25 percent as government tightens control

Argentina's September beef exports fell 25 percent compared to the same month last year as the National Agricultural Trade Control Agency (ONCCA) tightened export controls.

Restrictions on the issuance of Export Certificates (ROE) were tightened during the last weeks of August and early September.

Monthly export volumes were kept below 40,000 tonnes cwt, the government's target (including fresh, processed beef and offal).

Higher exports in July and August, together with tight cattle supply, maintained high cattle prices domestically, stoking inflation concerns on the part of the government. Argentina has the highest per capita consumption of beef in the world and beef prices affect the domestic economy.

The government is reportedly delaying the issuance of ROEs in October, concerned that the forthcoming rise in beef demand and high export prices may further lift live cattle and beef prices.

Meanwhile, beef production in September fell 13 percent compared with the same month 2006, partly due to a 6-percent fall in cattle slaughter.

This drop in production was also the result of the elimination of the minimum slaughter weight restrictions, which allowed more calves in total slaughter, thus sharply lowering average slaughter weights.