Argentina beef prices to pour more fuel on 116% inflation
Decision to temporarily weaken the exchange rate for corn exports — designed to spur shipments abroad — has bumped up domestic feed costs. Now beef prices are set to soar in the coming months.
Beef prices in Argentina are poised to soar over the coming months — fresh fuel for inflation already galloping at 116 percent annually in a country that eats the most red meat in the world.
Argentine beef inflation has stayed in check this year as ranchers flooded cattle markets because of a brutal drought that frazzled pastures, providing ample supply to butcher shops.
Beef cuts sold in stores in the Buenos Aires metropolitan area (AMBA), home to nearly a third of Argentines, cost 72 percent more in June than a year earlier. While that may sound high, it pales in comparison to overall inflation, which is comfortably in triple-digit territory.
A recent decision to temporarily weaken the exchange rate for corn exports — designed to spur shipments abroad — has bumped up domestic feed costs. Prices paid for livestock have therefore swelled over the last couple of weeks and are trickling down to supermarkets and butchers.
What’s more, as rains return to the Pampas farm belt — albeit slowly and unequally — ranchers are starting to take the opposite approach to drought times, keeping cows in replenished fields to rebuild herds. That will tighten supplies to meat-packers, pushing up both cattle and beef prices over the rest of the year.
“When the rains start falling normally, pastures will recover and farmers will withhold cattle,” said Miguel Schiariti, head of beef industry group CICCRA and a rancher himself.
Beef prices could rise 40 percent by October from June’s levels, according to CICCRA — though Schiariti said predicting the magnitude of the increase is tough after the corn measure and the faltering rains.
The timing couldn’t be worse for Economy Minister Sergio Massa, who is the ruling Peronist party’s main presidential candidate, before a key primary election on August 13 and the main vote on October 22.
Argentine voters vie with their neighbours in Uruguay as the biggest per capita consumers of red meat on the planet. Massa is already struggling to fight annual inflation. Food, clothing and home appliances have all driven the print, and fuel hikes at the pump show no sign of respite.
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