By Maximilian Heath
BUENOS AIRES (Reuters) – Argentina’s beef industry has posed a solution to a standoff with the government over beef export caps, put in place to increased domestic supply and tamp down inflation: fatter cows.
The sector chamber CICCRA on Thursday proposed that the government mandate a gradual increase in the weight of cows at the time of slaughter, which would over time increase the volume of meat for domestic consumption and exports.
Argentina’s ranchers were set for talks later Thursday over contentious export limits, with the government pushing for higher production in order to rein in rising prices. Inflation overall is running at an eye-watering annual level of over 50%.
“In two and a half years we will have increased meat production by 600,000 tons with the same livestock stock that we have today,” the chamber said. “It’s simple solution that does not require financial resources from the State.”
Argentine cattle currently must weigh at least 300 kilograms (661 pounds) in order to be slaughtered. The chamber proposed increasing that every six months until it reached 400 kg.
The leaders of Argentina’s main agricultural associations said they will press their case for total deregulation of the beef export market when they meet at around 6 p.m. (2100 GMT) on Thursday with Agriculture Minister Julian Dominguez.
‘TOTALLY OPEN’
Argentina is a key global supplier of beef as well as a top producer of soybeans and corn. Since mid-year the government has imposed export limits to curb domestic food price inflation.
The government’s interventions in the beef market have generated uncertainty in the sector, setting the stage for a showdown between ranchers and policymakers.
“Our intention is to totally open the export market, which would provide producers with policy predictability,” Carlos Achetoni, president of the Argentine Agrarian Federation, told Reuters, when asked about the objective of the meeting.
In the middle of the year the government limited exports of beef to 50% of the previous year’s normal volume.
Since then, left-leaning President Alberto Fernandez has relaxed the limits. But Achetoni said there are still some categories of cows whose meat cannot be exported, while some limits of international shipments to some locations like Israel and the European Union remain.
“Meat exports have to be 100% open,” said Nicolas Pino, president of Argentine Rural Association said. Reuters contacted the Agriculture Ministry but did not get an immediate response.
Pino said the industry is already providing plenty of meat for local consumers and that export limits were unnecessary.
Official data indicate that Argentina, a country of 45 million inhabitants with a bovine herd of 53.5 million animals, exported about 675,000 tonnes of beef between January and October, with 73.2% of those shipments going to China.
(Reporting by Maximilian Heath, writing by Hugh Bronstein; Editing by Alistair Bell)
