Argentina-Beef exports jump 36%.

ARGENTINA-JUMP IN BEEF EXPORTS OF 36%.

Argentina’s beef exports in March totaled 45,429

metric tons, up 36% on the year and up from 41,388 tons in February, according

to the latest data from the animal health and sanitation service, or Senasa.

Exports of fresh and processed beef an innards in March were valued at $150

million, up from $125 million in February.

So far this year, Russia has been the leading importer of Argentine fresh

beef, buying 21,063 tons. Israel followed with 8,866 tons and Venezuela bought

6,793 tons.

During the first three months of the year, Germany was the main market for

the pricey Hilton Quota shipments which enter the E.U. at reduced tax rates.

Germany bought 5,682 tons during the period, followed by The Netherlands with

2,586 tons.

Exports have bounced back in recent months due to the easing of restrictions

and a recovery in leading export markets. Starting in September and October

last year, those markets had cut purchases as the international financial

crisis saw demand plunge.

By volume, Russia is the largest single buyer of Argentine beef, although the

European Union buys more in dollar terms due to its residents’ taste for the

more expensive cuts. Argentina is the world’s fourth-largest beef exporter,

trailing Brazil, Australia and India, according to the U.S. Department of

Agriculture.

While the government has eased export restrictions, and is actually

encouraging shipments now to increase tax income, companies are having a hard

time getting enough of the large steers favored by overseas buyers, JBS-Swift

Argentina Director Jorge Bowie said recently.

Farmers with mixed grain and cattle production sold off their cattle early to

raise funds due to lower grain prices, damage to this season’s crops due to

drought and tight financing, Bowie said.

The number of cattle in Argentina fell sharply in 2008 compared to a year

earlier due to adverse weather, a higher slaughter rate and government policies

which spurred a shift away from ranching, including export limits and price

controls.

According to foot-and-mouth disease immunization records from Senasa, 57.7

million vaccinations were given during the second half of 2008, down 5% from

60.7 million at the end of 2007 and down 6% from 61.3 million at the end of

2006.

Virtually all of Argentina’s cattle are vaccinated against the disease each

year, making the data the most reliable gauge of total herd size.

The decline in herd size "is due to the increased slaughter rates seen since

the end of 2007 and the effect of the drought across much of the country in

2008 which led to the death of many cattle," Senasa said.

In addition, farmers complain that government restrictions on beef exports

designed to keep down local prices have battered the sector and spurred a major

shift away from ranching towards grain cultivation.

The price of beef is a highly sensitive political issue in Argentina, and the

government often shuts down exports when local prices spike. Residents consume

more beef per person than in any other country, with per-capita consumption

running at about 64 kilograms a year, according to the beef chamber, or Ciccra.

For over a year, Ciccra has been warning that the female slaughter rate,

which approaches 50%, is a clear sign that ranchers are trimming herd size

rather than retaining breeding stock.

This trend has continued for over two years, and "without urgent policy

corrections, the most pessimistic predictions of a shortage of steers in 2009

will come true," Ciccra said in a November report.

Faced with evidence of shrinking herds, the government has announced a series

of stimulus measures to increase production, but farmers are skeptical that the

plans will have a significant effect.

In March, the government published a series of resolutions including

subsidies, tax breaks and increased export quotas.

The quota for low-grade beef exports was expanded, and the percentage of beef

processed by exporters required to be sold in the local market was lowered to

65% from 75%.