MercoPress. South Atlantic News Agency

Cattle prices in Punta Arenas soar pushed by world demand for beef

After a decade of stalled values for live cattle in Punta Arenas, extreme south of Chile, prices for calves have almost trebled to over three dollars per kilo, which represents a 90% increase over a year ago.

Manuel Bitsch, Chile’s Agriculture Ministry regional representative said that prices for finished cattle could keep increasing recovering values of the first half of the nineties, particularly during the calves’ sales season March/June.

“There’s strong world demand for beef as some of the main Asian markets recover from the recession, including Russia, which has seen imports soar”, said Bitsch who added world supply remains stalled because of the falling prices of the last four years plus the fact that farmers are now retaining cows and heifers.

“Brazil, the world’s leading exporter has no further expansion capacity because of strong demand from the domestic market. In Argentina the cattle herd has diminished dramatically because of government policies and Paraguay has been supplying its neighbours covering the blanks” pointed out the Chilean expert.

More specifically in Punta Arenas a new abattoir has been certified, and export prospects are very good. “They are studying market conditions, cattle quality and cattle available and the possible evolution of prices with its impact on consumers”, said Bitsch.

He also mentioned the incidence of the distribution chain, which has a significant cost, from the abattoir to the butcher, but “as happened with lamb we will have to get accustomed to higher prices for beef and eating habits”, pointed out Bitsch who also mentioned that imported beef in Punta Arenas Free trade zone has accessible prices because of the weakened US dollar and strong Chilean peso.

Most of Punta Arenas lambs are shipped to boutiques in Santiago and other rich cities of the country or exported to the European Union for which Magallanes region has a specific certification.