January 5, 2007

Argentina's 2006 beef exports plunged 21.2 percent

Argentina exported 552 million tonnes of beef during 2006, a 21.2 percent decline in volume, the Argentine Beef Industry and Trade Chamber, Ciccra, reported Thursday (Jan 4).

The sharp decline in shipments is due to government measures designed to limit exports to keep domestic beef prices down, according to analysts.

However, higher meat prices caused the value of 2006 beef exports to fall just 4.8 percent to US$1.3 billion, Ciccra said. Russia was the principal market for Argentine beef, purchasing 33.4 percent of the volume exported during the first 11 months of 2006.

Argentina also saw beef production fall in 2006 as farmers shied away from increasing investment in the face of government imposed price and export limits on beef.

During the first 11 months of 2006, 950,000 less animals were slaughtered, a decrease of 7.2 percent from the same period a year earlier, according to Ciccra. However, increased minimum slaughter weights saw volume fall less sharply to 2.78 million tonnes, down 3.5 percent from the same period a year earlier.

In addition, Argentina's beef producers reduced investment by US$300 million in 2006, down 33 percent from a year earlier due to government intervention in beef markets, according to Argentine Rural Society beef analyst Marcelo Fielder.

Farm groups are incensed by a series of government measures designed to prevent inflation in domestic wheat, corn and beef. They complain that the measures deprive them of the value of their goods and force the sector to subsidise domestic food supplies.

Beef producers have cut investment in infrastructure, pastures, genetics, fertilisers and other inputs in response to the government measures, according to Fielder.