990350 Argentina's Beef Trade Starts '99 On Right Hoof

Buenos Aires - Argentina's beef trade is primed for a dramatic boost in exports this year as domestic cattle prices stay low and meatpackers have higher supply to choose from, industry observers said.

“For the packing industry 1999 will be better because the capacity to buy animals at lower prices has improved,” said Javier Martinez del Valle, director of the Argentine Chamber of Beef Producers.

After soaring to $1.30 per live kilo last year, internal cattle prices have stayed around $0.85 per kilo during the first two and a half months of 1999, encouraging banter that exports will range between 350,000 tonnes and 400,000 tonnes.

Last year's shipments, hammered by high prices and a parsimonious international market, totaled 280,000 tonnes, among the lowest counts over the last decade.

“I know exporters are in the money now and volumes are increasing,” said an analyst.

“Finally they're making a profit,” he added.

In January the Hilton Quota, Argentina's benchmark shipment of prime cuts bound for Europe, rose to 2,518 tonnes versus 1,722 tonnes a year earlier. In February the quota was about 100 tonnes more year-on-year.

Shipments to the United States reached 1,582 tonnes in January compared to 933 tonnes a year before. In February they were 1,293 tonnes, more than doubling last year's same month total.

Internal consumption of Argentina's reputable grass-fed beef is expected to climb to between 2.15 million tonnes and 2.3 million tonnes this year, up from a disappointing 1.9 million tonnes in 1998, analysts concur.

“Whatever is produced is consumed -- we don't have the possibility of stocking large amounts in Argentina,” said an analyst.

Internal consumption may waver somewhat because of a possible recession brought about by financial troubles around Latin America, Martinez del Valle said.

“Less growth may mean higher unemployment, which would influence the meat price. Nobody expects last year's high prices,” he said.

Big supermarkets that dominate Argentina's food sales are copping fat margins by not lowering their beef prices, an analyst said. Retail meat prices rose three percent in the year leading up to January 1999 even while the internal price of cattle plummeted 22%.

“Supermarkets aren't transferring the lower price of cattle to the consumer,” said the analyst.

Argentina is the world's fourth largest exporter of meat.

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