Argentina Closes Beef Exports

[farmers_son]

http://www.mla.com.au/TopicHierarchy/News/MarketNews/2010/Argentina%20closes%20beef%20exports.htm

Argentina closes beef exports

17/03/2010
The Argentinean government has banned all unprocessed beef exports, with the exception of High Quality “Hilton” cuts to the EU and offals as of the 13 March for an undefined period. The ban comes as a result of scarce beef supplies and soaring retail prices in the domestic market.

The measure was taken by the Secretary for Domestic Trade after meeting with local beef industry representatives on Friday. Despite having appropriate documentation and export certificates, a number of containers have been held by customs at seaports, airports and road borders.

During the meeting, the Secretary stated the need to control beef prices at the wholesale and retail level, encouraging supermarkets to perform regular lower priced sales and packers to release higher volumes at lower prices.

The government is changing its beef price control strategy – now targeting the end of the supply chain, as they have had little success in controlling cattle prices given the fall in supply. The government has announced the need to reach an agreement with export and domestic meatpackers, butcheries and supermarkets to supply at least 12 mainstream cuts at low prices (Infocampo).

[Happytrails]

This is great news cattle ranchers. It indicates to me that the demand for beef at low prices will always exceed the supply. That is contrary to certain schools of thought that hold that beef producers in Canada cannot compete with those in the U.S. and other countries. I think we can compete on basis of competitive costs and a superior product. Of course that dependant on our political masters not choosing to regulate us out of existence.

[grassfarmer]

Happytrails, I don't follow your logic.
How is this great for ranchers?
If a similar situation arose in Canada and there were soaring domestic retail prices (which is unlikely given the packer/retailer concentration levels) how does a Government implemented rule forcing retailers to sell some cuts for less money help the rancher? If they are forced to sell for less where do you think they would make up the shortfall? - the seller of fed cattle of course.
I don't see how this has anything to do with the competitivness/cost of production of Canadian beef relative to other countries.
If you are looking for good news for Canadian ranchers brought about by Government intervention it is more likely to happen if they act to limit the retailer/processor share of overall retail value. The retailers gross margin as a % of total retail value has allegedly risen from 19% in the 1970s to close to 60% now.

[Happytrails]

Reply to Grassfarmer.
1. Of course I did not mean this is good news for Argentinian ranchers. For them it is a disaster. However it might help the rest of us by making world markets realize that there is not an endless supply of cheap beef. Importing countries might become more concerned with securing a supply of beef than throwing up barriers to imports.
2. If we are still producing beef when world supplies run low that must mean that we are cost competitive with other producers.
3. As far as the packer/retailer share of the beef dollar I hear you 100% However I also trust the market to, over time, send the correct signals. I think our turn will come since without us the retailers make no money from marketing beef and people will be hungry.