Argentina Halts Feedlot Support
ARGENTINA - The Argentinean government will cease granting subsidies to lotfeeders for the fattening of animals for the domestic market, according to a report from Meat and Livestock Australia.
9 April 2010
1 minute read
The subsidy (in which the government reimbursed the difference paid by lotfeeders for grains used as inputs over a set price) will no longer be issued because the recent hike in finished steer prices has enhanced the profitability of the industry.
Although this measure will eliminate the distortion in the market (which left restockers at a disadvantage against lotfeeders),it is expected to further tighten beef supplies in the mid term according to Infocampo.
MLA said that this subsidy largely contributed to the 2009 beef production surge in Argentina, and increasing slaughter of young steers (which contributed to the liquidation process seen in recent years).
Other factors which fuelled slaughter and production last year were the government imposed industry controls (since 2006) and the severe drought which affected the region since 2008.
The local government now aims to boost production by supporting the fattening of heavy steers and progressively increasing minimum slaughter weights – a measure which has already decreased cattle supply in local markets.
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