December 17, 2010

Argentine beef production to fall again in 2011

Argentine beef production is forecast to decrease more in 2011 as producers continue to retain female cattle and turn-off mostly male animals to maintain cash flows.

The slump in cattle inventories experienced in recent years, which developed into extremely tight supplies throughout 2010, has seen domestic cattle prices increase more than 200% on-year. The high prices have encouraged producers to rebuild their herds, with the better returns expected to continue for at least the next two years.

Compared to cattle prices, retail beef prices rose by 100% during the same period, as domestic consumers resisted further price rises and per head consumption fell.

After falling 27% in 2010 to 11.7 million head, total Argentine cattle slaughter is expected to decrease around 9% in 2011, to 10.8 million head.