July 31, 2008

    

Argentina beef production down as farmers switch to profitable crops

  
  

Argentine beef production is down by 3 percent during the first four months of 2008, as falling margins for livestock and higher profits from arable crops, especially soy, is encouraging cattle ranchers to switch to crop farming.

 

Slaughter of female cattle, both mature and heifer, increased almost 7 percent from January to April this year, suggesting that big ranch operators are putting their money into growing grains to as world grain supplies are running low.

 

Furthermore, a recent ruling by the Argentine government not to increase soy export taxes has created an optimistic market for grain exports.

 

In contrast, the futures market for beef in US is bearish, as a USDA report signaling rising feed prices led to a six-week low for forward prices on store cattle entering feedlots.

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