Milei’s strong peso drives Argentina meatpackers to import beef

Renowned ranching nation Argentina is importing beef as President Javier Milei’s currency and trade policies make it more affordable to source supplies abroad while local prices remain high. 

Monthly imports from Brazil surged to 1,033 metric tonnes on average in the first half of the year compared to just 24 tonnes in the same period last year, a seasonal record for data going back 1997, according to official Brazilian data. Overall, Argentina’s total beef imports so far this year are at the highest level since 2019. 

Argentines consume annually about 50 kilograms of red meat, steadily down from previous years yet still ranking among the top in the world. With barbecues — or asado — part of the nation’s fabric, beef prices are closely watched by voters whom Milei needs to court in October’s midterm elections. Meat costs in June were up 53 percent from a year ago in the Buenos Aires area, well above 39 percent headline inflation.

While the rising beef imports hardly move the needle in a country that produces about 250,000 tonnes a month, they shine a light on Milei’s decision to keep the peso strong and open up Argentina’s economy to trade in order to quell inflation. 

Although the policies have undoubtedly helped to slow price increases for Argentines ahead of the October vote, they are also making imports cheaper. That has squeezed the trade balance at a time when Milei needs to generate more dollars as he seeks to stabilize the economy and meet International Monetary Fund targets.

The peso has weakened in recent weeks, but the current level of about 1,360 pesos a dollar is still considered fairly strong when taking into account the relative cost of goods and services.

“As Argentina has become more expensive in dollar terms, it’s opened the door to bring in beef from Brazil at competitive prices,” said Diego Ponti, an Argentine beef market analyst at AZ Group. “But it’s very small volumes — isolated deals by buyers close to the border, or trades by meatpacking firms that have plants in both countries.”

Meatpackers, who pay for cattle in pesos, have at times this year forked out the equivalent of almost 5 dollars a kilo for steers, according to data compiled by AZ Group.

Most of Argentina’s shipments — worth some US$ 3.4 billion last year — go to China. But with US President Donald Trump slapping a 50-percent tariff on beef from Brazil as part of his global trade war, that could create extra competition for the sales.

“Most of the surpluses that Brazil can’t get into the US will likely get allocated to China,” Ponti said. “That would lead Chinese importers to negotiate cheaper contracts.”

– TIMES/BLOOMBERG