FALL ARGENTINA' S BEEF INDUSTRY

Argentina' s beef industry: A Fall from Grace

Argentina has long been famed for its high-quality, melt-in-your-mouth beef – the crown jewel in its agricultural exports, and its global namesake.
Since 2002, Argentine exports of beef have risen steadily. This is due in part to an increasing demand for animal protein, coupled with the country’s increased competitivity following the devaluation of the peso that year. In 2005, Argentina was the world’s third largest beef exporter. The following year, however, marked the beginning of a startling trend reversal. As Argentine beef exports soared, a number of factors, policies, and market forces combined to engender Argentina’s dramatic fall from grace, threatening to render the booming industry an anachronism. By 2012, it had slumped to 11th place in global export ranks.




In sharp contrast to its ailing neighbour, sales of Uruguayan beef to the international market look set to increase. It ranked 7th place in 2005 and by 2012 had fallen by only one place. Firstly, Uruguay has been able to gain market share in countries where Argentina has failed to do so, such as Mexico, the US, China, Korea, and Vietnam. Secondly, it is exporting more meat to Europe via the new High Quality Beef 620 Quota –it is one of only five exporting countries that meet the stringent criteria.
Uruguayan beef is not treated with growth hormones and its farmers are able to verify the age of the cattle through a sophisticated tracing system.
July 2012 saw the annual volume under this quota rise from 20,000 tonnes to 48,200. The ascendance of this new EU beef quota may soon render the old Hilton Quota -whose suppliers include Argentina, Brazil, Uruguay, Paraguay, Canada, and New Zealand- obsolete.
Brazil’s rise to the top, both within Mercosur and worldwide, is nothing short of miraculous. In the 1990s Brazil was a net importer of beef, but by 2012 it shot up to second place in beef export rankings, just below Australia. This is due in part to the increase in heads of cattle from 173.8m to 187m between 2005 and 2012.