August 17, 2007

 

Uruguay's meat prices at record-highs

 

 

Severe drought in the northern region of Uruguay has brought meat prices to record-highs.

 

This has been worsened by severe winter conditions this year that delayed sowing of grains. Furthermore, last year's high slaughter was not supplemented by increased weaning rates.

 

July's slaughter rates have fallen 6 percent on-year and 9.3 percent during the first seven months of 2007 compared with 2006.

 

These factors have conspired to push wholesale prices up and prompted the local government to reduce the value added tax on certain meat cuts to relieve pressure on the prices.

 

Although exports were affected to a lesser extent by the price increase than domestic meat, prices remained high despite lower export volumes. Exports fell 12.6 percent on-year to 144,000 tonnes during the first seven months of 2007.

 

Increased shipments to the US, Canada and Mexico failed to offset the decreased exports to other destinations, such as Chile and Russia. This is partly due to the lifting of beef restrictions due to FMD in the Brazilian and Argentinean markets, which allowed more exports in these countries.

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