Argentina Beef Industry in Trouble

The director of Buenos Aires-based farm group The Rural Society says drought has caused pastures to dry up, and as a result forage prices have gained so much that farmers are allowing livestock to die in the fields. Arturo Llavallol says ranchers are killing higher than usual numbers of breeding stock, compromising future output. And that's not good news for consumers in Argentina, which is the biggest beef-consuming nation in the world. It is believed that Argentina may resort to importing beef for the first time, within the next two years.

Another problem is a move made by the Argentine government in 2006 to restrict beef exports to boost supplies in the local market. Since that move the nation's beef herd has dwindled 7%. The good news is consumption, which in 2006 was less than 60 kilograms per person. Now it is about 70 kilograms or 154 pounds of beef per person. Prices are the cheapest in the world at about $1.65 a kilogram compared to $2.82 in nearby Brazil.

Argentina's Senate will vote this Thursday on a bill that would give Argentina's President the authority to change farming policies without consulting congress. According to Llavallo, if their President would lift export restrictions, ranchers would then be able to receive better prices and, they could then stop selling breeding cattle for slaughter.