- Title: ARGENTINA: Poultry supplants beef as top Argentine meat export
- Date: 2nd November 2012
- Summary: SALADILLO, ARGENTINA (FILE) (REUTERS) VARIOUS OF CHICKS AND CHICKENS AT A CHICKEN FARM
- Embargoed: 17th November 2012 12:00
- Keywords:
- Location: Argentina
- Country: Argentina
- Topics: Business,Industry
- Reuters ID: LVA801S4P60GWVS849LKSJ83IJSH
- Story Text: Argentine poultry exports will hit a record high this year and for the first time supplant the country's famously delectable beef as the Pampas' number one meat product, official data shows.
Thanks to rapid growth powered by investments in technology and abundant supply of feed grains, Argentine poultry farmers are making headway while beef output lags under the weight of state intervention in the export market and erratic weather that dried up cattle areas last year only to flood them in 2012.
According to official figures, between January and August 2012, Argentina exported 163,000 tonnes of bird meat for about $265 million, up from 137,000 tonnes in the same period last year.
The South American country shipped 125,993 tonnes of beef during the same 2012 period.
Roberto Domenech, the president of the Centre for Poultry Processing Companies (CEPA) - which represents the chicken processing companies that make up most of Argentina's poultry sector - told Reuters that poultry producers only expect further growth in the future.
He said domestic consumption in Argentina - which has a famously high beef diet - has been up, partly because beef prices have risen in recent years as production has dropped.
"It is a sustainable growth. We started in 2002 with exports around 30,000 tonnes. In 2012 we are at 330,000 tonnes. All of this allowed, on the one hand, strong growth in the domestic market, because the of the price of chicken meat, as well as the high price of beef, and you could also add in an unmet demand for beef as a consequence of the droughts that hit the country and led to a reduction in herds. So, all of this together on top of already having a presence in more than 60 markets in the world has resulted in a constant, more gradual growth," Domenech said.
A key factor favouring productivity is the easy access that Argentine farmers have to grains that are used as chicken feed. The country is a top world exporter of soy, corn and wheat.
Raul Marso owns a poultry processing centre in the Entre Rios province north of Buenos Aires and told Reuters that genetics technology has also allowed poultry producers to meet demand and grow exports.
"The world is divided between those who consume white meat, which is the breast, and those who eat the entire chicken. The best example is the United States which consumes a lot of breast meat, and countries in the Gulf (region) that prefer small chickens at around a kilogram or a kilogram and a half. The genetics work with both of these things. I think the genetics is efficient at producing meat. Every year we get better genetics which allows us to use the same amount of corn and soy to produce more chicken meat," said Marso.
Argentina is among the top five world suppliers of poultry meat, although it remains far behind Brazil and the United States, which dominate the international market. Still, Domenech said chicken production is expected to continue to rise and Argentina will produce more than 2 million tonnes of bird meat this year versus 1.78 million in 2011.
The main destinations for the country's poultry products are Venezuela, China, South Africa and Chile.
"We have a plan from now until 2017 which is aligned with the Ministry of Agriculture and Industry's plans which projects 2 and a half million tonnes in production for 2017 and 600,000 tonnes in exports and a domestic market of consumption of about 44 kilos per person per year," Domenech added.
Argentina's cattle sector has been in decline over the last decade as land owners shift to planting soybeans.
Soy cultivation has exploded in the Pampas, crowding out traditional gaucho cattle ranchers as world grains prices soar.
Benchmark Chicago soybean futures have risen 28 percent in this year alone.
But meat remains a highly popular food in Argentina and its price is a politically sensitive issue as the country wrestles with double digit consumer price inflation.
The government has reacted by putting price controls on beef. This has been welcomed by local consumers, but the price caps have fuelled the shift away from ranching and toward soy.
The President of the Argentine Chamber of Industry and Trade of Beef (CICCRA), Miguel Schiaritti, said policies including the price controls and exchange rates against the dollar have added to the sharp decline in beef production here.
"I think the government made exportations (of beef) impossible for three years with the famous ROE which are export permissions which they hardly gave out, and (when they did they went) to their friends, and it required that for every one or two tonnes exported, the exporter had to leave one tonne in the domestic market which had to be sold at a ridiculously low (price). Today the loss in competitiveness is so powerful because of the exchange (rate in dollars) that even though this requirement no longer exists, you still can't export all," Schiaritti explained.
In the first eight months of 2012, Argentine beef production grew by 2.6 percent, compared to the same period last year, to 1.69 million tonnes.
Exports dove 28 percent during the same period, according to official data. - Copyright Holder: FILE REUTERS (CAN SELL)
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