ARGENTINA: ARGENTINE CATTLE INDUSTRY RECIEVES BOOST AS FAVOURABLE EXCHANGE RATES HELP INCREASE INVESTMENT IN BEEF BUSINESS

Record ID: 448939

  • Title: ARGENTINA: ARGENTINE CATTLE INDUSTRY RECIEVES BOOST AS FAVOURABLE EXCHANGE RATES HELP INCREASE INVESTMENT IN BEEF BUSINESS
  • Date: 8th July 2004
  • Summary: (W8) BUENOS AIRES, ARGENTINA (RECENT) (REUTERS) 1. VARIOUS OF GUITAR MUSIC DURING LUNCH IN THE CATTLE MARKET WITH EMPLOYEES AND GUESTS (5 SHOTS) 0.24 2. VARIOUS OF PEOPLE PARTICIPATING IN THE MARKET AUCTIONS (5 SHOTS) 0.53 3. (SOUNDBITE) (Spanish) CATTLE BROKER, FERNANDO SAENZ VALIENTE, SAYING: "We made mistakes. We were not in a position to stop vaccinating. But today we are fighting to get where we deserve to be." 1.04 4. CATTLE MOVING IN THE MARKET 1.13 (W8) ROSARIO, ARGENTINA (RECENT) (REUTERS) 5. WS: OUTSIDE OF SWIFT'S REFRIGERATION PLANT 1.17 6. VARIOUS OF THE PROCESSES OF SLAUGHTERING CATTLE, REMOVING AND CUTTING THE MEAT (7 SHOTS) 1.53 7. (SOUNDBITE) (Spanish) VICE PRESIDENT OF OPERATIONS, RICARDO PONS, SAYING: "If there was a bigger demand we would adapt to it, as we have done in the past. We always tend to produce the best value added products and keep advancing in the chain of values." 2.05 8. VARIOUS OF PROCESS OF VACUUM SEALING THE MEAT (2 SHOTS) 2.13 9. VARIOUS OF MEAT CANNING PROCESS AND OPERATORS WORKING (2 SHOTS) 2.23 10. VARIOUS OF WAREHOUSE (2 SHOTS) 2.32 11. (SOUNDBITE) (Spanish) AGRICULTURE SECRETARY, MIGUEL CAMPOS, SAYING: "The double standard has to end. If they limit beef because of foot-and-mouth, imagine how much more serious a mad-cow situation is. And the reality is that we can, as much with mad-cow as with foot-and-mouth, guarantee minimum risk and this is what we have always upheld. The discourse hasn't changed." 2.52 (W8) SALTO, BUENOS AIRES, ARGENTINA (RECENT) (REUTERS) 12. VARIOUS OF CATTLE STOCK IN THE OPEN COUNTRY (3 SHOTS) 3.07 (W8)BUENOS AIRES, ARGENTINA (RECENT) (REUTERS) 13. VARIOUS OF A TYPICAL BARBECUE IN THE CATTLE MARKET (4 SHOTS) 3.30 Initials Script is copyright Reuters Limited. All rights reserved
  • Embargoed: 23rd July 2004 13:00
  • Keywords:
  • Location: BUENOS AIRES, ROSARIO, AND SALTO, ARGENTINA
  • Country: Argentina
  • Reuters ID: LVA2B84KD94634A2BS2GASQTYL8R
  • Story Text: The Argentine cattle industry is getting a boost
    because of favourable exchange rates that are helping to
    increase investment in the beef business.


    It's 9 o'clock in the morning -- slabs of mouth-watering
    steak go from sizzling grill to table, red wine flows in
    abundance and a guitar player leads a rousing
    round of singing.

    It's time to mark the end of a good week's work at the
    world's largest cattle market in Buenos Aires. And lately,
    workers in Argentina's beef industry have reason to
    celebrate.

    Nearly four years have passed since Argentina's last
    major outbreak of the highly contagious foot-and-mouth
    disease, made worse by the government's failure to report
    it promptly as international rules demand.

    The succulent grass-fed beef from the pampas was banned
    from foreign markets in early 2001 and many meatpackers
    went bankrupt. The Argentine economy's collapse in 2002
    made things even more difficult.

    But as cattle broker Fernando Saenz Valiente explained,
    Argentina's beef industry is fighting back.

    "We made mistakes. We were not in a position to stop
    vaccinating. But today we are fighting to get where we
    deserve to be," he said.

    Now with the cattle disease under control, markets are
    reopening and exports are up 50 percent by volume so far
    this year.

    Investment is coming back and some traditional meat
    packing plants have new owners, like U.S.-based
    agribusiness group Cargill in its first incursion into
    Argentine beef.

    One of the main draws is the low cost of raising and
    processing cattle after the sharp devaluation of the peso
    during the crisis in 2002. The peso now trades at around 3
    per dollar after 10 years of a one-to-one peg.

    For people like Ricardo Pons, vice-president of Swift,
    Argentina's top beef exporter, it's all about meeting the
    demands of a growing market.

    "If there was a bigger demand we would adapt to it, as
    we have done in the past. We always tend to produce the
    best value added products and keep advancing in the chain
    of values," he said.

    Argentina's beef barons admire neighbouring Brazil,
    which once exported the same amount as Argentina of around
    400,000 tonnes per year. Now, in 2004, Brazil is poised to
    overtake Australia as the world No. 1 beef exporter with
    1.4 million tonnes.

    Argentina, the top exporter a century ago thanks to
    British investment, has slipped to No. 8 in the rankings
    with just 6 percent of the world beef trade. Exports
    represent a mere 16 percent of Argentine production of 2.5
    million tonnes.

    However, the current government of President Nestor
    Kirchner believes Argentina can reach exports of 1 million
    tonnes in four years.

    At the top of the government's agenda is rebuilding
    credibility on health to gain access to the recalcitrant
    U.S. and Japanese markets, which still ban fresh Argentine
    beef. The European Union imports 50 percent of Argentine
    beef, 65 percent of which is high-quality fresh cuts.

    Agriculture Secretary Miguel Campos is concerned about
    the double standards regarding health risks, although
    isolated cases of mad cow disease in Canada and the United
    States in the last year might weaken any remaining
    resistance to Argentine beef.

    "The double standard has to end. If they limit beef
    because of foot-and-mouth, imagine how much more serious a
    mad-cow situation is. And the reality is that we can, as
    much with mad-cow as with foot-and-mouth, guarantee minimum
    risk and this is what we have always upheld," he said.

    Argentina hopes to be declared free of foot-and-mouth
    with vaccination this year and is already considered free
    of mad cow disease, having banned feed with animal parts
    years ago.

    Everyone in these parts agrees that one of the best
    selling points of Argentine beef is the healthy way cattle
    are raised, usually just on the natural grasses of the
    pampas.

    But finding sufficient grazing land may be a problem as
    Argentina's stellar farm crop -- soy -- spreads across the
    fertile pampas. The area planted with soy has grown 250
    percent in the last decade.

    To compete, Argentina's cattle prices have to rise,
    experts say, and for that to happen exports have to take
    off.

    Regardless of the export market, the locals do their
    part in sustaining the beef industry with per capita
    consumption of 130 lbs (60 kilos) per year -- double the
    amount of the beef-loving United States.


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