December 30, 2003
Argentina Beef and Soy Exports To Rise Following US BSE Case
Argentina expects to see an increase in its beef and soy exports following the mad cow case in the United States, the Argentine Agriculture Secretary said yesterday.
As the world's No. 1 soymeal exporter, No. 3 soybean exporter and No. 8 beef exporter, Argentina is well-poised to benefit from the fallout following the first confirmed U.S. case of the deadly mad cow disease.
International prices for Argentina's prime crop, soy -- the main vegetable alternative to feed cattle -- could rise further on the scare. Argentina could also benefit from increased sales of beef from its mainly grass-fed cows.
"The first impact undoubtedly will be an increase in revenue due to higher prices and more demand for soy-based products," Agriculture Secretary Miguel Campos said in an interview.
Unofficial estimates of how much Argentina stands to gain per year range between $500 million and $2 billion, but Campos said he would wait to see how the market responds before making any predictions.
According to U.S. Department of Agriculture data, Argentina this campaign will again top the list of soymeal exporters with 19.96 million tons and will export 11.5 million tons of soybeans -- third behind Brazil and the United States.
Soy-complex sales are Argentina's top source of foreign currency, bringing in $5.475 billion between January and September of this year.
Although Argentina has lost hundreds of millions of dollars since a 2001 outbreak of foot-and-mouth disease, its beef industry is more likely to benefit than be harmed by the mad cow scare, Campos said.
"Argentina's great advantage is that (beef) production is based on pasture feeding. The use of rations that include meat meal is much lower (than elsewhere). Argentina, possibly along with Brazil, are the countries with the lowest risk," Campos said.
For the last eight years, Argentina has been acting to prevent an outbreak of bovine spongiform encephalopathy (BSE), and it is recognized as adhering to the strictest international standards. However, Campos said, "no one is free from this disease."
Campos said he thinks Argentina may have an opportunity to supply markets that have temporarily banned U.S. beef imports.
And the benefits could extend even further if Argentina regains access to the lucrative markets -- including that of the United States -- that remain closed to its world-renowned beef due to the foot-and-mouth outbreak.
"This situation leads us to ask what is riskier today in the beef market: a market with the risk of foot-and-mouth or a market with the risk of BSE," Campos said.