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Cattle Crisis Resumes in Argentina

12 August 2009

ARGENTINA - Argentineans consume more beef than anyone else in the world, about 160 pounds per person annually, and more than twice as much as Americans. So this year, as local beef prices rise -- over 20 per cent so far in 2009 -- Argentina has been worried.

According to CNN Money magazine Fortune, the price hike is due to scarcity. Not only have Argentina's gaucho ranchers been suffering through a terrible drought, which dried up the grass fields where cattle graze and eat, but the global recession is increasing demand for corn, wheat, and soybeans as consumers turn away from pricey protein, writes Telis Demos, staff writer at CNN. As a result, many of Argentina's farmers are converting their fields from grazing to grains, now the country's top export.

Argentina's so-called "beef crisis" has been ongoing for a few years. Thousands have been laid off from beef-processing plants after problems with disease-control led many countries -- including the U.S. -- to limit their Argentine imports to processed rather than fresh beef in the early 2000s. Brazilian competitors have bought up weakened local producers.

Argentina's populist-minded government tried to tame local beef prices by banning exports in 2006 to increase the supply at home, reports CNN. But ranchers were furious; they rioted and blocked roads to the cities, leading prices to shoot up fourfold. Some ranchers decamped to the more liberal pampas of Uruguay, now a top-seven beef exporter.

Besides wounded national pride, the bigger-picture problem is that the lack of export income from beef, along with the drop in grain prices and an existing budget crisis. Some Argentine farmers have finally started to switch to the beef equivalent of a hybrid-car: mechanized grain feedlots and antibiotics for their cattle. It's antithetical to the grass-fed, chemical-free ideal that made their meat so special, sure, writes Telis Demos. But it might be better than a growing dependence on foreign beef -- and another financial crisis.

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