“There are slaughterhouses that are not going to work two of the five days of the week, while others are with significant reductions in work or fail to complete their plans. This will continue next week and for a while as well”.
This was confirmed by Mario Ravettino to Field Bugs the decision that a large part of the businessmen of the export meat sector took before the abrupt change of scenario that the livestock value chain is going through.
The fact that national government officials have decided this week – as they have done on other occasions – to cut off authorization of exports to force a new domestic price agreement, shows the scant knowledge that Minister Sergio Massa’s management has of the sector.
For a few weeks now, refrigerators have been making great efforts to stock up on goods in a context of notable shortage of supply.
An important exporter told this medium that “there are no heavy steers; we have to buy lighter cattle, between 350 and 420 kilos, where supermarkets are bidding hard”.
The liquefaction of international bovine meat prices, together with the climate disaster, “exchange retentions” and export rights and quotas, removed incentives to produce heavy animals destined for foreign markets. Additionally, the oversupply of cattle caused by the drought is no longer present.
La Gran Moreno: The government temporarily closed meat exports to try to prevent prices from continuing to rise and force an agreement
Another consulted exporter recognized the same situation in his company: the lack of income is increasingly notorious and will surely be exposed in the August slaughter statistics.
This tension between supply and demand began to be reflected in prices, which in the case of heavy steer jumped from $1,200 to $1,700/kg hook in a matter of days.
In the 2022/23 cycle, the greater entry of calves to the feedlots, as a result of a climatic disaster that liquidated a large part of the forage reserves, caused the massive confinement of very light calves and financial emergencies in many cases caused them to be sold. with lower weights than usual.
This is reflected in the indicator of the average slaughter weight per beef, which last July was 225 kilograms, a figure 11 kilos less than that of the same month last year. This phenomenon, contrary to the efficiency of the system, occurred simultaneously with a year-on-year growth in beef production of 10% in the first half of the year.
Producers who have farms, mostly light, can now value their product after many months of selling cages and cages of steers and steers underselling.
An industrial exporter who also sells a portion of the supply in the domestic market said “I have a small job for the local market but I can’t even get that, so this week I had zero fan.”
Some uninformed observers concluded that the farm price adjustment was a reaction driven by the devaluation that occurred this week, but both phenomena, although simultaneous, are not related.
Both the value of the farm and of bovine meat were lagging far behind general inflation and, at some point, it was expected that they would align with the rest of the prices in the economy.
The official data corresponding to last July –known this week– show that the “beef basket”, which includes roast, shoulder, rump, buttock and minced meat, then showed year-on-year inflation of 92.5% versus 118, 6% the average of food and non-alcoholic beverages in shops and supermarkets in the city of Buenos Aires (CABA-GBA).
That is to say: beef had been “running” far behind inflation and the movement registered in recent days is actually an adjustment that equates beef with the rest of basic goods and services.
Beyond speculation and charlatanism, prices, in a market with almost perfect competition such as bovine, reflect an evident lack of supply, which not only affects males, but also cows, since they have finished “clean” the breeding fields of unproductive bellies.
So: if you stop fishing because there is no farm, what was the point of closing exports? A question that officials who want to manage the markets from their desks surely cannot answer.
In the cattle slaughter data, a drop in supply is already noticeable, which explains why the market continues without finding a ceiling
2023-08-17 02:36:50
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