Late last week, news reports from Argentina suggested that the government planned to suspend export permits for 15 days in an effort to reduce prices for domestic consumers. The practice of controlling beef exports, including limiting export permits, has caused significant harm to Argentina’s beef industry in recent years, contributing to a shrinking cattle herd and conversion of agricultural land to uses other than cattle production. Not surprisingly, last week’s announcement drew strong opposition from Argentina’s cattle producers and beef processors.
This week the Argentine government appeared to pull back from its original announcement, with Interior Minister Florencio Randazzo stating that no export freeze has been ordered. More details on the situation were reported in the Latin American Herald Tribune.
In the first half of this year, Argentina’s beef exports were modestly lower than a year ago at 111,247 metric tons (mt), down 2 percent. But this decline came despite a surge in exports to Russia (29,963 mt, +30 percent), Argentina’s largest volume market. Preliminary data show that Argentina’s July exports were the largest in more than four years, driven by strong demand in Russia and China. Argentina’s cattle prices are the highest among South American beef-exporting countries, most recently averaging $1.72/lb., up 19 percent year-over-year (carcass price in U.S. dollars).
Data sources: Global Trade Atlas and World Beef Report