Argentina’s beef industry is confident it could soon rejoin the list of the world’s largest beef exporters after its Government recently removed several long-standing barriers to its export trade.
Since taking office in December the country’s new president Mauricio Macri has given the country’s farm sector a helping hand by axing most crop and beef export taxes and has allowed the peso currency to depreciate by 40 percent.
The country’s exporters have reportedly already responded aggressively and turned up the heat on Australian wheat exporters in the highly competitive Middle Eastern wheat market, where Argentina can now supply wheat at a lower price that most other competitors.
Argentina is also set to ramp up beef sales to a record high this year, with a think-tank formed by the country’s grains exchanges forecasting a five-fold jump in sales to an all-time high of 1.3 million tonnes in 2016.
“Argentina is now free of foot-and-mouth disease, so we can enter Asia as soon as we increase our herd,” said one Buenos Aires-based analyst was quoted as saying in this Reuters article.
“Argentina has approved sanitary protocols with China in meat and dairy products, this will be direct competition for Australia and New Zealand.”
Argentina used to be the world’s third-largest beef exporter with about 800,000 tonnes shipped each year. But figures started to drop in 2005, and now the country ranks 13th with about 200,000 tonnes exported per year, according to figures reported by the
But figures started to drop in 2005, and now the country ranks 13th with about 200,000 tonnes exported per year, according to figures reported by the Buenos Aires Herald.
The USDA expects Argentine beef exports to increase by at least 25 percent in 2016 to 280,000t as a direct result of the new Macri administration policies, which would be the highest volume in seven years.
A recent survey by the CREA farming lobby group indicated that about 65 percent of Argentine meat processing companies expect to increase their stock in the next few months.
“Kirchnerism steeply limited exports. Now we can get back to the top ten but not this year, it will take time. The sector has a lot of room to grow,” Argentina Rural Society (SRA) head Miguel Etchevehere was quoted as saying. “The government already took some important steps, now we’ll need to close trade deals and try to get access to new markets.”
The country’s beef industry hopes to return to the “major leagues” of beef exporters by 2017 or 2018.
However achieving that feat will not necessarily be an easy task, the Buenos Aires Herald suggested, because beef production in Argentina will have to change to meet export demands after years of focusing on the domestic market.
“This will be a transition year as we need to start producing larger animals (to meet export market requirements), that takes time. We’ll be ready in two or three years,” Ignacio Gomez Alzaga, head of the Alzaga Unzue beef shipping company, told the Herald. “There’s just no more steers to export, we can’t even fulfill the Hilton quota goal.”
Analysts say 150 meat processing plants destined for exports closed their doors over the last few years.
However, in the wake of the new more export friendly Macri policies, there are already signs businesses are responding.
The world’s largest meat processing company, JBS, has announced it will open four factories in Argentina exclusively for exports, according to the herald.
The plants had been shut down in 2012 when trade restrictions were implemented.
“The sector is much more competitive and the government clearly wants beef exports to grow. We’ll probably reach 300,000 tons exported in 2016, which is a low figure considering the country’s potential,” Victor Tonelli, beef sector consultant, told the Herald. “Now the limit only comes from us as we have to produce larger animals for exports.”
Argentine beef is expected to begin selling into the US in coming months after its Government came out on the winning side of a long-running World Trade Organisation dispute, ending a 12-year ban on Argentine beef in the US.
Export markets likely to be in the country’s sites now include Taiwan, Mexico, China and Japan.
“While we weren’t doing anything over the last few years, other countries signed bilateral treaties and lowered trade tariffs. We have a lot of catching up to do,” Victor Tonelli said.