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Argentine Meatpackers Suffer As Cattle Numbers Fall

08 September 2010

ARGENTINA - A sharp reduction in the number of cattle roaming Argentina's Pampas plains is hitting the country's meatpackers, forcing some to cut workers' hours or close their doors for good.

The South American nation, one of the world's leading suppliers of beef, corn and soybeans, still has more cattle than people, but the national herd has shrunk by 10 million head in the last three years, to about 48 million, reports FoxBusiness.

Many ranchers have sold off their herds due to several years of harsh drought. Others have turned their fields over to more profitable soy, blaming the government for eroding ranching profit margins with export curbs and price caps.

Brazil's JBS, the world's biggest beef producer, said last week it was considering selling some of its Argentine plants and meatpackers have protested in recent months overcuts to hours

A few of the country's approximately 440 beef-processing plants have closed down since the livestock shortage started to bite late last year, raising the cost of Argentines' favourite food and prompting fresh government export restrictions

"As of now, 10 meat-packing plants have closed and another 10 are having serious problems," said industry consultant Ignacio Iriarte.

Argentine beef production is set to fall 24 per cent this year to about 2.6 million tonnes, Mr Iriarte said.

Meat-packing plants are currently operating at just 60 per cent of installed capacity due to the lack of livestock,according to private sector industry think-tank CREA.

The dwindling livestock supplies have driven up prices at the country's Liniers cattle market, where the rambling pens and horse-riding assistants are a reminder of the country's rich ranching heritage.

Prices of steer, used as a benchmark at Liniers, have risen 90 per cent over the last year, market data shows. Butcher shops have hiked their price tags to reflect that, forcing many consumers to abandon their beloved steak.

TheMeatSite News Desk

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