October 27, 2011

Argentine beef shipments fall 19% on year

Argentina's beef shipments fell 19% on year between January and September this year because of low supplies, record domestic prices and ongoing export restrictions imposed by the government.

Soaring domestic prices which increased 39% on year during January-September (in local currency terms) have encouraged packers to sell product in Argentina. Conversely, export prices rose 36% to US$8,278/tonne, with an average 15% rise in EU 'Hilton' high quality beef product to US$14,633/tonne.

These price increases were driven by a 24% rise in live cattle prices during the period to US$2.05/kg lwt, an impressive 157% jump from the US$0.80/kg lwt in 2006.

Argentina remained tight following the liquidation of the herd in recent years. During January-September 2011, slaughter fell 12% on year to eight million head (from 12 million head during the same period in 2009). However, as slaughter weights increased, production eased by only 7% on year to 1.86 million tonnes cwt. During the same period, domestic supplies fell 5% to 1.7 million tonnes, reducing annual consumption to 54kg/head from almost 70kg in 2009.