The loss of purchasing power has an impact on beef consumption, which reflects increases on the farm and at the counter.
Domestic consumption of beef decreases due to increased farm and counter prices, while the lifting of the ban increases exports and contributes to increased prices in the local market.
Victor Tonelli, a private livestock and beef consultant, said the steer market index in the Canuelas Agrograndero market (MAG) has adjusted by about 18% so far this year, “but if we take into account the value of November”, when the settlement cycle ends. Still going on, the adjustment was about 70%.”
According to him, the improvement in beef prices is due to the fact that “they were a little behind”, but also due to the “increasingly significant share of exports within the total available supply”.
Exports were slightly more than 30% of the total in December and closer to 33% in January, which for Tonelli is a product of “the liberation of prohibitions and restrictions on exports”.
Along with the increase in exports, he assured that the effects of inflation have led to an “unprecedented decline in purchasing power and consumption volumes, which average around 40 to 42 kilograms per inhabitant per year”.
The consultant estimated that current farm prices, which are approximately $1,700 to $1,800 per live kilo for a good consumer steer, and $1,600 and a fraction of the steer index in Canuelas, “will be maintained through February”, which “would imply That means we’ll be talking about an average meat price of between $6,000 and $6,500, which would be 10% higher than in January.
The president of the Argentine Chamber of Commerce and Suppliers (CAMyA), Sergio Pedès, assured that “prices are going to be strong and gradually they will increase and will rise with inflation” and pointed out that the increase “no longer depends on domestic consumption. “, because people have turned more to pork, which is much cheaper, and chicken, which has already reached its peak.
Similarly, he stressed that “the price of beef will depend on the dollar and the value of exports and the number of steers that Argentina will be able to export.” Due to the drought, he said there are “a million or so fewer calves, and even fewer females” and estimated that “if projections can be made the herd will be reconstituted within a year and a half or two years, before No.”