Argentina January beef exports slump as government slows shipments

Argentine beef exports slumped in January as the government stalled shipments to increase domestic supply in the face of soaring local prices.

 

Argentina exported 25,680 tonnes of beef in January worth US$120 million, the animal health and sanitation service, or Senasa, said in a report Wednesday (Feb 24).

 

That is up 1% in volume and 13% in value on the year. However, export sales in January 2009 dropped off sharply due to the international financial crisis.

 

January 2010 shipments were down from the 29,730 tonnes exported in December, when the government began to slow permits. The country exported 39,592 tonnes in November. Russia was the largest single buyer of Argentine fresh beef exports in January 2010, taking 6,479 tonnes, Senasa said.

 

While exports are officially open, companies complain that red tape is being thrown up to decrease shipments. On December 14, the government stopped approving beef exports for two days, but has since loosened controls on chilled beef shipments. Since 2006, the government has frequently blocked shipments when prices spike.

 

Argentine beef production is expected to slump in 2010, auguring a year of higher prices for local consumers and decreased exports, the beef chamber known as Ciccra said in its February report. The expected drop in production follows near-record output last year as ranchers thinned herds due to drought and government intervention in beef markets.

 

Beef production last year totalled 3.54 million tonnes, more than 10% higher than the previous records set in 1978 and 2007, according to Ciccra.

 

With output surging, exports of fresh and frozen beef were up 57% on the year at 419,335 tonnes, according to Senasa. Those exports were valued at US$1.65 billion, up 11% on the year.

 

The effects of that reduction in breeding stock in past years are just being felt now as cattle have a production cycle of about two years. Likewise, it will take as much time to restore herd sizes.

 

According to the USDA, Argentina's beef production is seen falling 13% to 2.8 million tonnes in 2010. The country is expected to begin the year with a herd of 50.2 million, down 10% from just two years ago.

 

Local beef prices have surged by about 25% so far this year, angering consumers in a country with one of the highest per capita consumption rates in the world.

 

That follows steep price gains over the past two years. Live cattle prices rose 76% over the past 24 months, while consumers faced a 58% increase. "Everything indicates that these movements will continue during the current year," according to Ciccra.