USDA GAIN: Livestock and Products
08 March 2012
USDA GAIN: Argentina Livestock & Products Semi-annual
Argentine beef exports for 2012 are expected to decline to 280,000 metric tons, 20,000 tons lower than USDA’s
current volume. However, the final volume will be decided by the Argentine government which authorizes
export licenses. A severe drought during the service period is expected to somewhat reduce the calf crop. The
recovery of the cattle herd continues but at a slow pace. Production:
Argentine beef production for 2012 is forecast to remain unchanged at 2.6 million metric tons (MMT), despite
an expected larger slaughter than USDA’s current level. The slaughter is expected to increase as result of a
severe drought and very high temperatures suffered during December 2011 and January 2012. Larger than
expected number of cows and calves will be slaughtered, being lighter animals they will bring down the average
carcass weight. In late January and February the rains returned with a vengeance but many pastures were
already damaged. The level of reserves for next winter will be significantly lower and of poorer quality than
normal.
The cattle ending stock for 2012 is now projected at 49.6 million head, a drop of 400,000 head from USDA’s
official number. This is a result of the negative effects of the drought and high temperatures during the key
period of service which is expected to produce a smaller than expected calf crop and to a slightly higher
slaughter than previously projected.
Based on recently released preliminary data, the calf crop for 2011 was higher than USDA’s number. This
increase is the result of better weaning ratios because of very good weather conditions in 2010-11 and high
cattle prices which encouraged producers to invest more in obtaining the largest number of calves possible.
Trade:
Argentine beef exports for 2012 are now forecast at 280,000 metric tons, 20,000 tons lower than USDA’s
current volume. Again this year the industry expects the government to determine the level of shipments
through the administration of export licenses. As soon as cattle or beef prices begin to increase, the
government would be expected to restrict export authorizations to ensure stable domestic supplies. Another
factor which will negatively affect local exports is the devaluation of the peso which is projected to run at a
slower pace than inflation, making Argentine beef exports less competitive in the world market. The main local
exporting plant of thermoprocessed beef is currently not shipping product to the U.S. since last year as FSIS
found ivermectine residues in some products. The sanitary services of both countries and the company are
working to overcome this situation. Exports of thermoprocessed beef to the US in late 2011 were very small
and they are expected to continue that way until the problem is resolved.
There are currently 120-150 meat packing plants closed, of which 30-40 have federal transit authorization.
Most large beef export companies are in a difficult situation due to the small volume they are able to process
and sell. A good number of export companies have reconverted their business from exporting to selling into the
domestic market. However, if policies and market conditions encourage larger exports, most plants could begin
operation quite fast.
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