April 30, 2007

South America to further enhance its meat production

South America's emergence in both the domestic and world markets has been the dominating issue in the opening sessions of the International Meat Secretariat (IMS) regional conference last Thursday (April 26) in Sao Paulo, Brazil where it was attended by delegates around the world.

Opening the conference, the organizing chairman, Sebastiao Costa Guedes, said that the aim of the discussions was to examine the position and development of meat markets around the world. However, he added that while Brazil has one of the most significant outputs of meat in the world, it is meeting barriers to its trade.

In the opening session, Antenor de Amorim Nogueira, the coordinator for the Brazilian National Forum of Beef Cattle Production from the CNA (the Brazilian Confederation of Agriculture and Livestock), said that Brazil's production has recently been hit by low prices because of excessive slaughter, which is reducing the national herd. He said some issues are to be faced by South American cattle farmers such as the growing gap between production costs and prices as well as the probable unfair competition from a subsidized industry in regions such as Europe.

He said that it was Brazil's aim to increase its production and the size of the beef herd from 44 million head to more than 61 million.

The domestic picture where beef consumption dominated the market in Argentina was outlined by Marcelo Enrique Fielder, the executive secretary of the Argentinean Ruralist Association. Similar developments and expansion of meat production were outlined for the meat industries in Uruguay and Colombia.

However, Richard Brown, a director of the market analysts GIRA, told the conference that unless countries such as Brazil took on the mentality of exporting nations such as New Zealand and Denmark, where they had to export to survive, they could find it difficult to open new markets for their expanding production.

He said Brazilian farmers should know the level of their meat and its markets to be able to negotiate a price rather than undersell and drive prices down.

Brown added that when Brazil increased its production of pork, markets such as the USA, EU, and Japan were not open to it, and it was forced to sell into Russia where prices were low and often below the price of production.

He concluded markets will only open if the problems are recognised and dealth with the mentality of long-term meat exporter.