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Argentinean Beef Production Set To Decline

28 October 2009

ARGENTINA - Falls in domestic production and increases in demand are likely to lead to increases of imports.

The latest figures published by the Argentinean Beef Industry Chamber (Cirrca) show that beef supplies are at the highest levels seen in the last 20 years. This is against a backdrop of relaxed local government export restrictions, ongoing liquidation in the breeding herd and the effects of prolonged drought. This is leading to some commentators suggesting that Argentina will soon become a net importer of beef due to lower domestic production over the medium term combined with ongoing increases in per capita consumption.

For the first eight months this year, Argentinean beef supplies were 16 per cent ahead of last year at 11 million head. Half of these supplies are comprised of cow supplies, indicating ongoing strong liquidation of cows. Cirrca suggest cows accounting for anything above 43 per cent of total supplies suggest liquidation of the herd.

The stronger supplies have led to a surge in beef exports with GTIS data showing a rise of 60 per cent to 279,300 tonnes pw up to the end of August. The EU remained the primary destination for Argentinean beef with a 38 per cent increase to the end of August at 67,700 tonnes pw.

The Argentinean herd is estimated at 57.7 million head for 2008 with forecasts suggesting a drop of 5 per cent in 2009. With Argentinean beef consumption rising by 7 per cent for the first seven months of the year there are fears that the country will not have the resources to maintain domestic consumption over the medium term without severely curtailing exports.


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