For the past four years, the ranchers who parade perfectly primped bulls at La Rural- an annual agricultural show as old as Argentina’s war of independence - have lamented how much their herds have dwindled.Price controls imposed since 2006 have made them sell a growing percentage of female calves for meat, a trend known locally as “la liquidación de vientres” (”the sale of the wombs”), and to turn their land over to arable farming. But as this year’s show opens, the beef price is high. In fact, it’s about double what it was 12 months ago. Why?
Simple. Supply and demand. The government’s efforts to force the beef price down hurt farmers so much that it recoiled. In 2010, Argentina is home to as many asado (rib)-lovers as ever, but to only 80 per cent of the cattle. A drought last year that killed about a million animals helped to push prices up suddenly in the last quarter of 2009.
Since then, officials at ONCCA, the agency that controls export permits, have barely granted a single one, says Juan José Grigera Naón, a committee member at La Rural. This technically means that Argentina has an informal beef export ban.
Last year, Argentina exported about 400 000 tonnes of beef, about half of the 2005 total. This year, Grigera Naón, who is also an agronomy professor, estimates Argetine farmers will slaughter 12.5m cows, far fewer than the 16m killed in 2009, so meat prices will stay high.
But at least, farmers now have a bit more cause for hope than they did a year ago. They can now turn to a about dozen members of the lower house of Congress - up from zero - who are either farmers or have strong connections to the trade.
This new political stock has yet to produce any laws that curb ONCCA’s power or reduce the extortionate export taxes on crops like soybean, which stands at a whopping 35 per cent. But such bills are being prepared and introduced by the bundle.
Unsurprisingly, poor urbanites are not so happy. A typical cut of ribs, for example, has risen from 17.31 pesos a kilo in December 2009 to $22.60 in June 2010. Ernesto Kritz, a labour economist, calculates that the rise in the price of beef accounts for 70 per cent of the change seen in the cost of a basic family basket of goods in the first half of this year.
Most tellingly, perhaps, Argentines have consumed beef at an average annual rate of about 40 kgs per person per year over the past few months. That is a lot to most omnivorous humans, but it’s down from about 57 kgs of beef per Argentine in 2009. And if they keep the recent rate up, they will likely this year lose their long-held title as the world’s biggest beef eaters. The honour would pass to neighbouring Uruguay. Which also did better in the World Cup. Argentines may find that news hard to digest.
By Anna Petherick in Buenos Aires for FT.com
Source: http://blogs.ft.com/beyond-brics/2010/07/23/argentina-wheres-the-beef/
