MercoPress. South Atlantic News Agency

Live cattle prices in Uruguay sliding after peaking in August

Green fields in spring but lack of rainfall and poor pastures forced farmers to sell cattle

Live cattle prices in Uruguay after reaching a historic peak in mid August have begun to drop significantly following the meat industry's decision to soften activity and a drop in demand from Russia and to a certain extent the European Union.

According to a report from Uruguayan cattle breeders live prices had been increasing since the beginning of 2008 precisely because of the lesser winter supply of cattle and strong export demand. The tendency was so strong that cattle prices in Uruguay were above those paid in the United States, Australia and Brazil. That is how in three weeks live cattle prices lost 11% having dropped from 3.70 to 3.30 US dollars, --and fallingâ€" but with not many sales. However it must be taken into account that since spring 2007 Uruguayan farmers have been forced to send cattle to the abattoirs because of the insufficient rain fall and dried pastures, in preparation for the winter months. The number of cattle slaughtered in abattoirs gives an idea of this process: very high volume in May and June followed by a moderation in July and a steep drop in August. Even when there's a speculation component in the bullish market with daily prices on the rise, the dominant factors are indeed insufficient autumn forage and fortunately a rather benign winter. However cattle brokers estimate that there are sufficient pastures, which added to feed lots ensures a good supply of cattle in the last quarter, which will be traded at lower prices, but above those of twelve months ago.