MercoPress. South Atlantic News Agency

Soybeans flatten, and cattle is back in Argentina.

The considerable profit margin of planting soybeans over growing livestock in Argentina has begun to dramatically revert, according to a report from the Meats Trade and Industry Chamber of Argentina, Ciccra.

The report indicates that the increase in livestock prices, the international drop in grain values and higher soybean internal production costs have combined to show that during the last two months cattle yields are more attractive than those of soybeans plantations.

Livestock prices in Argentina's main cattle market Liniers, have steadily risen during 2004 totalling an 8,5% increase in US dollars and 10,6% in the last twelve months, which "more than compensates production costs", points out the report.

Soybeans prices on the other hand have "contracted 31,9% in Buenos Aires Grains and Oil market" reaching the range of 165/175 US dollars per ton in the port of Rosario, after having recorded an exceptional value of 249 US dollars per ton last March 23.

Regarding soybean production costs in Argentina, they have steadily surged from 164,9 US dollars per hectare in October 2003 to 217 US dollars last August, indicated the Ciccra report. This represents a cost increase of 25,6%.

Therefore "in the last two months cattle yields were above those of soybeans as was the case in 1990/1992 and 1998/2000 which coincided with the rebuilding of the Argentine cattle stock".

The report forecasts that the livestock revaluation tendency will continue in the near future given "the growing overseas demand for beef and the high level of domestic consumption", which apparently was 63,1 kilos per capita during the first seven months of 2004.