MercoPress. South Atlantic News Agency

Kirchner and cattle farmers on collision course

Argentina is planning to limit beef exports by 30% and to make cattle's slaughtering weight more flexible in an attempt to increase domestic supply, according to press reports in Buenos Aires.

Cattle corporations and the meat industry apparently have been informed of government plans which will be made public next December first.

Last March when a similar situation with soaring beef prices in the domestic market threatened the government's inflation target, Argentine President Nestor Kirchner decreed a total ban on beef exports.

Cattle breeders were furious but with time beef prices declined and exports were gradually opened and the ban suspended just a few weeks ago. However since then the price of beef in Buenos Aires butcher shops has again picked up on average 15%. Apparently farmers have decided to retain cattle to fatten them given the excellent weather conditions, but the government is determined to keep annual inflation from reaching two digits.

According to the Argentine press export limits will apply to all the different beef cuts including the highly priced Hilton quota. Only offal will remain unlimited.

The government's target is for beef exports to remain in the range of 30.000 tons between December and next March 2007, which should help contain the traditional end of the year and summer holidays' increased domestic demand.

However cattle breeders' organizations have made public their displeasure with the anticipated decision. Luciano Miguens president of the all powerful Argentine Rural Society said that if the export limit becomes effective, "the disappointment will find a way to express itself".

Pedro Apaolaza, president of the Buenos Aires and La Pampa farmers association warned that it's only "fair" that farmers should organize a stoppage if the anticipated measures are applied. "A strong reaction is inevitable is beef exports are limited".