(Photo: an advertisement in the Aurora tower in Shanghai, promoting Argentine beef. China represents 66% of the total beef exports)
Buenos Aires, May 21st. Argentine beef exports are steadily increasing. During the first quarter of 2019, exports climbed to 97.165 tons (product weight), 33% more than in the same period of 2018. And China is the vacuum cleaner of the Argentine beef. In 2015 the Asian country represented 31% of the total exports; climbing in 2018 to 56% and reaching 67% in the first 2019 quarter.
But while exporters are celebrating this news, some “collateral effects” are taking place in the local beef value chain. Desperate to supply the slaughterhouses, ranchers are selling its cows and heifers.
It is considered that when cows slaughter surpasses 45%, it enters in the liquidation phase. But during April, cows slaughter reached 52.5% and it is peaking 54% in the current May, marking a new record in the local cattle history. A report from the industry warning that 50% of the cows sent to slaughter were pregnant, which implies 200,000 calves less this season.
The cattle inventory remained without changes between 2018 and 2019, around 53.9 million heads, and Rosario Livestock Market (Rosgan) is forecasting that it will drop next March 2020, due to the cow liquidation cycle.
In fact, the latest report from the under-secretary of Livestock recognizes that beef production is downing 4.6% in comparison to 2018, at the same time that exports are climbing 33 percent. This is generating a restriction for local consumption. Between April 2018 to April 2019, beef cuts prices were up between 67 and 74% (in AR$), above the inflation rate (55%) and conducting a reduction of the per capita beef consumption, which during April drilled the floor of the equivalent to 50 kilograms per capita per year.