Buenos Aires - Floods washing over pasture land in northern Argentina are expected to stymie beef exports already reeling from high local cattle prices and a slumping international market, experts said.
Argentina's 1998 beef exports are pegged at 350,000 tonnes, down from recent estimates of 400,000 tonnes and a substantial decline from 430,000 tonnes last year.
“It's double jeopardy,” said Agriculture Undersecretary Jesus Leguiza. “There is the high internal cattle price that doesn't allow meat packers to compete abroad, while on the other hand in the coming year the floods are going to mean less supply.”
Floods in Argentina's northern provinces have resulted in 12 people dead, 70,000 evacuated and enormous losses in the agriculture sector that have yet to be fully calculated. Leguiza said data concerning the cattle industry's woes will come to light in two to three months.
“We know the damage is going to be bad,” he said, adding that waterlogged provinces such as Corrientes, Santa Fe, Entre Rios, Formosa and Chaco are all major grazing lands.
“That's a vast cow-calf region,” said an analyst. “(The flood losses) could hurt the recovery of the stock.”
Argentina cattle stocks fell to 51 million head in 1996 from 55 million in 1994, but were expected to rise 4.0 million to 5.0 million by 2000.
Rubbing salt in exporters' wounds is a faltering international market.
“Domestic cattle prices are still very high at $1.00 to $1.10 per live kilo, while the world market isn't easy,” said an analyst.
Argentines are expected to continue chewing their yearly chunk of 2.1 million tonnes of beef, but the mad cow scare has cut short demand in Europe, where 101,675 tonnes of meat were sent in the first 11 months of 1997.
Germany took 49,829 of the beef, including the lion's share of the Hilton Quota, a 28,000 tonne pot pourri of choice cuts sent annually to Europe.
Other January-November beef shipments last year included 78,419 tonnes to Chile, the largest individual market; 28,661 tonnes to Brazil; and 73,464 tonnes measured in carcass weight to the United States, the majority of which was thermo-processed corn beef and frozen beef.
This year local cattle prices are 25% higher than those of 1997, however.
“Exporters are in a crunch because they're buying expensive material locally and not selling the finished product at good prices,” said an analyst.
The grim situation offers few alternatives, he noted.
“It's not a wise move to stop supplying the market you've developed, but nonetheless exports will drop, attending all markets with lower volume,” the analyst said.
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