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Montevideo, September 24th 2021 - 02:42 UTC

 

 

Export caps keep hurting Argentine livestock producers and consumers alike

Saturday, September 4th 2021 - 08:52 UTC
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Retail prices of meat have not fallen despite the Government's intentions and announcements Retail prices of meat have not fallen despite the Government's intentions and announcements

The Argentine Government's policies restricting meat exports have taken their toll on livestock production and slaughter, bringing down domestic consumption as prices went up, just what the measures were supposed to avert, according to a Rosario Stock Exchange (BCR) report released Friday.

The study warned that the continuity of restrictions on beef exports until October 31 will affect the external performance of the cattle and meat chain, as well as the local market.

The document also pointed out drops in work, production, consumption and exports had been recorded, while prices paid to producers decreased while retail prices continued to rise, albeit moderately.

The survey also detailed that slaughter in the May-July quarter was the lowest since 2016, with an yoy fall of 12.3% and far from the 3.5 million head slaughtered in the same period of 2020. This decrease resulted in meat production falling by 10.7% to reach 720,000 tons of bone-in beef, the lowest for this period since 2017.

The protective measures also had a negative effect on consumption and exports in the same period analyzed by the BCR. Compared to 2020, consumption fell by 6.5%, reaching 34.39 kilos per inhabitant and became the lowest record per inhabitant recorded by the Agriculture Ministry. Meanwhile, exports fell by almost 21%, which in hard currency would be tantamount to a loss worth US $ 150 million.

Export caps were anything but good news for producers. Since the beginning of the year prices at the Buenos Aires Liniers Market for cows fell 1.7%.

“The investment period involves extensive cycles and the absence of clear rules severely damages the confidence of investors in the primary sector and industry,” Economists Alberto Lugones and Julio Calzada were quoted by Infobae as saying.

Export caps bring uncertainty to agriculture when making decisions such as rotation regarding areas destined to pastures and green crops, in addition to the foregone economic losses which affect rural employment and local development in places like the province of Santa Fe, which accounts for around 40% of national meat exports.

“This is a clearly discouraging outlook for livestock producers in an inflationary context. The price of the calf is the one that suffered the most from the closure of exports in May, but the price of the cow is the one that decreased throughout the current year,” the analysts pointed out.

Since the cap on exports, “consumers have not registered considerable drops in [retail] prices,” and “if Argentina wants to consolidate itself as a supplier withreliable food globally, the closure of meat exports goes in the opposite direction,” they summed up.

According to an Argentine Rural Society (SRA) report released this week, the losses in the cattle and meat chain due to export restrictions, exceeded US $ 1,000 million. “We are not happy not only for the sector I represent; We are not, because the decisions made by the National Government evidently harm the entire country,” SRA President Nicolás Pino had said.

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