Argentina may import beef

That's right, fans of grass-fed beefy goodness. For the first time in history, the land of beef could be forced to import steaks and ribs and roasts just to meet the local demand of the biggest beef eaters on the planet. No more exporting beef, either. The story in yesterday's Clarin is as disorienting as "sending coal to Newcastle" or selling snow to eskimos.

Please don't blame me. Faithful readers will remember my worrying about beef production here and the low slaughter weight and sending mother cows to the carnecería in much greater numbers.

I can add a little something more to the story of beef here: I don't think that the traditional grass-fed beef really exists anymore in Argentina. At every auction we attended this season, there were no traditional "winterers" buying calves ...only the feedlot operators. And prices were so low that I can't count the number of cows that were sold for less than you would pay for a whole beef tenderloin.

Importing beef will be controversial enough ...but get ready for some bonus quilombo: Argentine beef producers are limited to an artificial low price in order to keep the cost of beef low to Argentine consumers. The price of foreign beef can't be controlled in the same way.

Will Argentina not only import beef ...but also pay foriegn producers more than they allow their own citizen producers to be paid?

via www.campodiario.com.ar: (hat tip to 99!)

"As production drops, Argentina could have to import beef for the first time in history.

A report circulating privately in the Government admits for the first time that Argentina may have to import beef in 2010, if its inhabitants continue to consume some 68 pounds annually per capita, the highest in the world. .

In the U.S., which remains on the list consumed 44 kilos per capita.

Specialists from the Ministry of Agriculture estimated that meat production in 2010 would fall to 2.67 million tons from 3.11 million expected this year. In this scenario there will be no meat for export. And it would be necessary to purchase some 1.000 tons abroad, to meet the consumption was estimated at 2.68 million tonnes.

The official report is very short but contains key figures to understand the magnitude of the crisis affecting livestock. It was prepared by the Directorate of Agrifood Markets and already reached the hands of the secretary and the minister Carlos Cheppi Débora Giorgi. Clarín, able to access a copy of the work, confirms the critical early stage by all private analysts, but so far denied by the Government.

What the report says? The current stock cattle, 55.3 million animals could retreat in 2010 to 47.9 million head, and hence meat production also fell sharply. The diminished the supply is about 438 thousand tons. The setback would be 14%.

The government agriculture experts do not address the causes of such a strong downturn; they simply limit themselves to producing the figures. Clearly, however, taking into account the fierce drought and other equally devastating phenomenon, which can't be addressed too much: the very policy of "stepping on" domestic prices and limiting exports discouraged cattle production, at the time gave a high domestic consumption. The high killing of females, over 50% of slaughter, gives an accurate account of this long liquidation process that began in 2006.

In this scenario, the report does not rule out the possible importation of beef in 2010 in order to supply the local market, as well as the disappearance of exportable balances. Argentina, which became the first beef exporter in the world five decades ago, would not only abandon its reputation but also the income from the sale abroad of some 450,000 tons of beef cuts. In 2008, foreign orders accounted for U.S. $ 1.500 million.

This projection was constructed without taking into account other variables such as average slaughter weight (currently 214 kilos on the hook) and the consumption of meat, which since 2007 has remained stable between 67 and 68 kilos per capita. This means that the shock scheduled for 2010 could be avoided by any of these ways: up the weight of the cattle that reach the refrigerator (and thus increase the production of meat) or to reduce the consumption of Argentines. The first alternative seems unlikely in the midst of a severe drought and the price of grains. The second option is politically and culturally very resisted.

Many private analysts had already figured that Argentina would import beef in the short term. But others, like the respected Ignacio Iriarte, don't believe that it will come to that. Rather, they consider that when higher prices occur they will act as brake on internal consumption. Although higher prices have already appeared, in relative terms, beef can remain competitive. That is: one kilo can cost $20, but yields more food than a pizza. Although pizza may be cheaper, beef could be worth twice the price."

Source: Clarín, May 12, 2009