August 25, 2011

Uruguay faces cattle supply constraint

Uruguay faces cattle supply constraint as slaughter figures for 2011 and 2012 have hit its lowest, estimated at around two million head, since the countries Foot and Mouth Disease (FMD) crisis in 2002, states the Uruguayan Meatpacking Industry Association.

The lower cattle throughput come as a result of a combination of factors, namely the severe drought in 2009, high live cattle exports, along with the very strong competition for land, especially from cropping enterprises.

Total Uruguayan cattle slaughter in 2011 is expected to fall 9% on 2010 levels, 23% lower than the record number processed in 2006. 

The lower cattle slaughter and beef production for 2011 has also been reflected in export volumes during the first seven months of 2011 (in a country that exports approximately 65% of its production), falling 23% on-year, to 121,234 tonnes swt.

The resilient demand from Uruguay's export markets and higher global prices has resulted in a 37% increase in average export prices during the seven month period, averaging US$5,876/tonne. For the same period, cattle prices have risen 32%, to 378US¢/kg cwt.