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ECONOMY | 21-05-2021 13:31

Argentina’s beef-export ban to stoke steak prices worldwide

Argentina’s unorthodox beef-export ban is the latest disruption to supply chains that is forcing consumers to pay higher prices for meat.

Argentina’s unorthodox beef-export ban is the latest disruption to supply chains that is forcing consumers to pay higher prices for meat.

The government halted shipments of beef for 30 days as inflation approaches 50 percent annually. However, Argentina supplies almost one-quarter of China’s beef imports and the ban is expected to shake up global meat markets, namely by prompting buyers in China to buy more from Brazil and the United States

Meat prices have stayed high since the Covid-19 outbreak sickened workers at meat plants, halting output just as consumers were preparing more meals at home. Beef prices may now remain elevated to account for a spike in exports and with more restaurants reopening and US citizens grilling burgers and steaks during summer barbeque season.

Already, rising anger among US cattle producers and consumers as retail beef prices surge is building political momentum in Washington for greater scrutiny of the four companies that dominate the meatpacking industry.

“Shutting out China’s number two supplier for a month will spur prices higher globally,” said Brett Stuart, cofounder of Global AgriTrends, a consulting firm.

China has been ramping up imports of both meat and animal feed to offset declines in the hog herd there due to African swine fever.

Potential switching away from Argentine supplies could start to show up in export data due next week from the US Department of Agriculture. Even before Argentina announced the ban, importers in China bought about 9,200 metric tons of US beef in the week ended May 13, the most on record.

Meanwhile, Brazil — the top global beef exporter and China’s biggest supplier — should see bigger shipments through May and the first half of June, said Felipe Fabbri, an analyst at São Paulo-based Scot Consultoria.

In the United States, wholesale beef prices have climbed nine straight days, with choice-grade meat priced at US$323.52 per 100 pounds, the highest since last year during the onset of the pandemic, USDA data shows.

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by Michael Hirtzer, Bloomberg

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