The decline of Argentina's beef industry

Argentina has made a name for itself around the world with its steaks.

But things are changing dramatically in this country.
Fish exports have overtaken the more traditional beef exports, which reflects the rapid decline of the farming sector in recent years.
The latest figures seen by the BBC show that during the first quarter of 2011 Argentina exported more than 145,000 tons of fish and seafood, double the amount of beef sent abroad during the same period of time.
And while fish exports are on the rise, beef is looking at the wrong side of the scale.
Farmers say that production levels are still falling fast, largely because of the government quotas on beef exports that have been in place since 2006.
"The government decided to cut down on exports in order to push for an increase in the internal offer of beef, in an attempt to reduce the price of the product for local customers," says Carlos Pujol, a beef trader in Buenos Aires.
"But the type of cuts that our industry exports is not the same type that is consumed inside Argentina.
"Therefore the stock levels have dropped as there is no incentive to produce something that won't get eaten."
Traditionally cuts like filet mignon are destined for exports, while others like skirt tend to be a popular choice within the country.
Falling heads Official figures show that in 2005 there were more than 57 million cattle heads in Argentina. Last year this number had fallen to 48 million - a drop of more than 15%.

 

To put things in perspective, neighbouring Uruguay, a major beef exporter, has a stock of about 11 million cattle heads, almost the equivalent of the amount lost in Argentina in the last half a decade.
Argentine beef exports also show a steep decline. In 2005 Argentina sent 483,000 tons abroad, whilst in 2010 the figure was less than half, as the year closed with 191,000 tons of beef exported, the lowest in a decade.
The Argentine government insists its priority is to guarantee cheap beef for the population, with a strict grip on export allowances.

"It is a typical measure of left-wing governments. We are now producing a beef with lesser quality but cheaper for local consumers," says Mr Pujol.

Also the drop in prices has not necessarily meant an increase in consumption.
Quite the opposite, in fact: between 2009 and 2010 annual consumption fell from 68kg per person to 56.7kg.
This meant that for the first time in a century Argentina lost (to Uruguay) the top spot as the world's biggest meat-eating nation.
Fish records But while there is less Argentine beef in foreign markets the country's fish is gaining ground.
In 2010 the fishing industry in Argentina had a record year for exports, with more than $1.33bn (£816m) worth of fish and seafood sold abroad.
For this year things are still looking promising, admits the president of the Council of Fishing Companies in Argentina, Oscar Fortunato.
The sector has exported more than $400m in the first quarter, which represents a jump of almost 40% from the same period of last year.
"The growth in the volume of exports of fish and seafood is happening while the beef exporting industry is going through difficult times. But both events are not related in any way," Mr Fortunato tells the BBC.
In recent years the Argentine fishing industry has been widening its targeted markets. It currently exports to Asia, the Middle East, Europe, the Caribbean and even neighbouring Brazil.
White fleshed fish is a typical product, but seafood represents an important part of the production because of its higher selling prices.

Argentineans eat little fish, so the industry relies almost completely on exports

"Although things might be going well for us we have a different level of risk," adds Mr Fortunato.
"We don't have an internal Argentine market where we can sell our products, almost 95% of the production is exported.
"If we would place 7% or 8% of our production for local consumption the market would be saturated," he adds.
This is because of a traditional and cultural characteristic of the Argentine diet.
"We don't normally eat fish. This is definitely still a beef-eating country," says Alberto, a fishmonger in Buenos Aires.
But the happy times for the Argentine fishing industry have dark clouds ahead.
Hand by hand with the increase in exports there is also a rise in production costs, especially in labour.
Workers pushed and obtained for better salaries, with a rise of at least 65%, which came into effect this year.
Mr Fortunato also explains that the industry is subject to the variations in international prices for fish and seafood.
"We feel limited because we don't have a local market where to place our products," he says.
But for now, things in Argentina are looking much brighter from the sea than from the traditional grasslands where the iconic steak is produced.
Source: BBC News