Meat Industry INSIGHTS Newsletter

990608 Argentina '99 beef export forecast dips

June 2, 1999

Buenos Aires - Argentina's 1999 beef exports should be less than the 350,000 tonnes foreseen at the start of the year, but domestic consumption is on the rise at the expense of chicken.

“Exports are probably going to be less than foreseen,” Carlos Maria Diez, general manager of Compania Elaboradora de Productos Alimenticios (CEPA), said.

The quality and quantity of manufactured beef products flowing out of Argentina has faced stiff competition from Brazil since the latter devalued its real currency in January, Diez said. Argentina's giant neighbor has channeled more processed beef products into the market while cutting its customary purchases of expensive Argentine sirloins and ribs.

Consensus among chief exporters is that low-riding international prices have hampered Argentine shipments as well.

Argentina's famed grass-fed beef exports were expected to come storming back this year after hitting a decade-low 280,000 tonnes in 1998. The revival was banking on the opening of new markets, drastically cheaper internal beef prices and rejuvenated supply.

However, exports in the first quarter of 1999 were headed for a measly yearly total of 250,000 tonnes.

Going the opposite way of exports is Argentina's domestic consumption, which topped out at 77 kilos of beef per capita in March according to official data. CEPA officials had earlier forecast that each Argentine would scarf down 65 kilos of beef this year as overall domestic consumption inched back up to 2.150 million tonnes from 1.9 million tonnes in 1998.

In the swinging 1960s the average insatiable Argentine wolfed down a yearly 90 kilos of beef, washing it down with 90 liters of wine per annum.

That compares to a current diet of about 43 to 44 kilos of beef per capita in the United States.

“Yes, domestic beef consumption per capita has risen, and that's good news, because (red) meat was going down as chicken was going up in recent years,” said Diez.

“People are turning back to (red) meat,” he added.

Supermarkets looking for volume sales on lower margins have slashed beef prices, allowing Argentines to indulge in their first love.

“Basically the price has gone down from a maximum last year,” said Diez.

In some supermarket chains in Greater Buenos Aires, over-the-counter beef prices are 15 percent lower than a month ago and 34 percent less than August 1998, according to the Cattle Communique newsletter.

Beef prices now sit at about $4.15 per kilo, while chicken runs at $2.15 per kilo. Average chicken consumption per head is 25 kilos per year.

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