As part of a talk organized by Federation of Argentine Regional Refrigeration Industries (Fifra), the zootechnical consultant Fernando Gil described a complex landscape for the activity, analyzing the values of consumer finance and margins for production and the industry.
One of the variables that worries this value chain is the price recomposition of consumer categories, fheld back for five months.
LOOK Livestock, bogged down: although meat is behind inflation, consumption does not rebound
On this matter, the analyst considered that in December there could be an improvementbut smaller than expected by the industry.
At this point, the combination of the markets lowest supply has an influence. feedlots that are emptying and increased traction in the consumptionby the proximity of the Christmas holidays.
AIM: “Fast” fattening: due to drought, high costs and stretched price, the farm has 50 days less feed
If this scenario persists, Gil estimated that the the recomposition will be greater between February and Marchwhen the pens are less busy and the consumption capacity improves after the holiday period.
COSTS INCREASING…
Over the past year, he has explained that while the corn has increased by more than 90%breeding for slaughter increased by 57% and wintering by 40%.
In this context, the feedlot business is one of the most affected links. According to the data of Argentine Chamber of Feedlot (CAF), the loss per fattened head -counting production and financial costs- amounts to $30,500. The interest rate hike is a hard blow to the business to swallow.
In order for feedlotters to recover profitability, the consultant has calculated that the price of consumer credit must be greater than $100. Currently, steers and heifers do not exceed $330 per kilo live.
…AND PRICES WHICH DO NOT INCREASE
Meanwhile, prices are suffering double wear, both domestically and in exports. According to official data, meat also recorded increases lower than inflation and in October it did not exceed 3%, against a monthly increase of 6.3% in the variable one.
AIM Carbap has called on the government to release meat exports “urgently”.
Exports have also tightened their belts, with the value per tonne exported to major destinations plummeting. In case of European Unionthe tax Hilton per ton fell from US$17,000 to US$9,000 and China’s from US$6,000 to US$4,500.
“This decline is more pronounced when taking into account the exchange rate lag and the gap with the real dollarso the chain doesn’t get those dollars but a lot less,” he said.
