The Argentinian government are in discussions with the beef industry this week around the resumption of beef exports. A 30 day complete ban expired on Monday and the suggestion is that exports will resume, but only at half the volume of last year until the end of August, when there will be a further review.
The Government’s decision to block exports was based on rising prices in the domestic market, caused by the combination of rising global beef prices and ongoing weakening of the Argentinian peso. According to IPCVA, the Argentinian beef promotion agency, Argentina exported 897,500t of beef in 2020, putting them fourth behind Brazil, the US and Australia. Three-quarters of all Argentinian beef exports go to China, while Europe is the main market for steak meat exports.
Interestingly, at a time when Europe and Ireland are looking to curtail beef production, Argentina is exploring how they can increase output significantly to have more supply available for the domestic market. The Government is proposing to bring a livestock plan forward in the next 30 days to incentivise producers to increase beef output from 3.2m tonnes annually to 5m tonnes.
This would inevitably mean a significant increase in livestock numbers. The absence of Argentina for the past month and reduced future supply will create a tightening of global beef supply. It is a similar picture in Australia at present, with herd rebuilding following drought and this has been reflected in an increase in global beef prices.