Double Beef Production Through Increased Weights

ARGENTINA - Despite the rise in cattle prices three weeks ago followed by the sharp down turn last week, cattle analysts are forecasting a strong rise in live cattle prices (already seen in cows) for 2010 and 2011, given the significant tightening in supply, robust domestic consumption and pick-up in international demand.

9 November 2009

2 minute read

South America

Local agents estimate that low cattle prices have bottomed-out, and that supplies will become very tight into the final quarter of 2009, says Meat and News Daily.

Some producers have already started holding onto cattle despite the urgent need for cash flows, given the strong expectation for prices to improve.

The drop in cattle and beef supplies comes as a result of an estimated 5 per cent decrease in the local cattle herd in 2009, with around 60-70 per cent of the breeding herd reportedly in poor condition due to the drought.

Since 2006, the Argentine cattle herd has contracted 15 per cent, with the high slaughter of female and poor calving rates adding to the decline.

Cattle turnoff and beef supplies for the first eight months of 2008 were at a record high, up 12 per cent year-on-year, which helped to maintain low prices and a surplus for exports.

However, the United States Department of Agriculture has forecast a 30 per cent decrease in exports for 2010, and although there is no consensus in the local industry, it is recognised that, exports will drop, as domestic beef prices rise and the government tightens export controls.

The main problem in Argentine beef production is the fact that 85 per cent of the cattle are slaughtered at a live weight of 300 to 350 kilos which is 50 per cent lighter than the rest of the world. If the Argentine farmers took their cattle to heavier weights for slaughter, the beef production could be doubled without one extra animal required, believes Meat and News Daily.