November 29, 2011


Argentina to produce 1.85 million tonnes of poultry meat



Argentina is slated to produce a record 1.85 million tonnes of poultry meat next year, higher than initially expected owing to the extent of investment in a sector gaining an increasing place in the local cuisine.


The rebranding of Argentina, built largely on beef, as a chicken producing nation is to continue apace next year, driving its exports to 10 times their level a year before.


While Argentines remain as the world's top beef eaters, eating 56 kilogrammes per person per year, annual consumption of chicken has topped 36 kilogrammes per capita, doubling in less than a decade.


"Chicken has stopped being a 'substitute' meat and became an 'alternative' meat," USDA officials in Buenos Aires said.


"Nowadays, with the same amount of money used to purchase one kilogramme of beef (short ribs) it is possible to purchase almost three kilogrammes of poultry," compared with a ratio of 1:2 two years ago.


However, exports have seen an even bigger impact of the country's expansion in poultry over the last decade, since currency devaluation in boosted Argentina's export potential at a time when avian flu was hampering Asian rivals.


Broiler meat exports are to hit an all-time high of 250,000 tonnes next year, a rise of 19% on-year, and 10 times the figure in 2002.


"The country continues to make sustained efforts to maintain an excellent sanitary status and competitive costs," the USDA officials said in a report.


Argentina, now the fifth biggest broiler meat exporter, now ranks higher in poultry than in beef, in which it is the eighth biggest shipper, falling since 2009 behind the European Union, New Zealand and Uruguay.


The sector's growth reflects, besides the eradication of major diseases such as Newcastle disease, producers' easy access to feeds, with Argentina the second-ranked soybean exporter and third biggest shipper of soybeans.


While prices of these crops have increased worldwide, Argentine poultry companies receive perks unusual for a government often seen as thwarting farmers by controls on exports and domestic food prices.


Producers gain compensation for corn prices above ARS293, about US$69, a tonne in return for ceding some control over meat prices.


Furthermore, the industry is spared the heavy export taxes applied to some crops, of 23% for corn and 32% for soymeal, attracting duties of 2.5% to 5%.


The favourable regime reflects the success in lobbying by a sector which is relatively concentred, with the seven leading producers responsible for 78% of slaughter, Rabobank said in a briefing last month.


"The relative concentration has allowed players in the industry chamber, Cepa, to work together and negotiate with the government has a united front," Rabobank analyst Paula Savanti said.


Despite the sector's concentration, there was still scope for acquirers to muscle into the market through deals unlike in Argentine beef, which Cargill has quit of, Ms Savanti said.


The poultry groups are "small and medium-sized companies by international standards, and there is still room for consolidation and for other players such as grain producers or foreign companies to enter the market through acquisition".

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