June 6, 2011

Argentine cattle herd fails to rebound

The Argentine cattle herd continued to decrease last year, declining 2% to 47.9 million head as at March 2011, according to current data revealed by the local Animal Health Service (SENASA).

Numbers are also 17% lower when compared to 2008.

The 2% decline in the herd occurred despite a sharp fall in the number of female cattle processed, dropping to 43.3% of total cattle slaughtered, compared to 50.3% in 2009. Argentina's cattle liquidation peaked in 2009, the result of the poor prospects for the industry at the time, largely due to government intervention combining with severe drought conditions.

Although producers have retained female cattle in 2010 and into 2011 in order to begin restocking, cash flow pressures continue to plague many producers, with higher prices making selling an attractive option. Also, despite the higher live prices in 2010 and 2011, rising input and feeder cattle costs have constrained rebuilding momentum.

The Argentine cattle industry structure has been altered since a number of feedlots surfaced in 2009 (driven by government subsidies), displacing cattle from the more productive cropping areas. Argentina's research entities are now focused on increasing productivity through feeding and production efficiencies in marginal regions.