Sticking their hands inside the pens, little kids giggle as they try to pet a 500kg cow while their parents adoringly take pictures. A few feet away at a restaurant called ‘Las Razas’, hungry customers are busy ordering steak after steak. Some Argentines at the annual Buenos Aires agro-fair are probably even eyeing the prized cows for their next parrilla.
A staple here, each Argentine eats about 68kg of beef per year or about 80% of the beef produced in their own country. Yet, according to a study by the Agrarian Federation of Argentina (FAA), Argentina is seeing its lowest meat production in 45 years. There is now increasing fear amongst the agriculture sector that producers will soon fail to meet domestic demand, which will make Argentina import beef for the first time in its history.
The simultaneous cow petting and eating took place at La Rural, the biggest agricultural exhibition in Argentina. Here, it is not a cattle rancher’s priority to win a special ribbon and a tiny silver plate for best in show. They come to promote their breeds in hopes of garnering more buyers. Yet, in addition to a decrease in production, higher cattle prices have made it increasingly difficult for ranchers to sell off their beef.
At the cattle market at Liniers in Buenos Aires some 38,000 head of cattle pass through the 34 hectare auction house (the biggest in the world) every week, a steep drop since the 70s, when that number was as high as 125,000.
As the overpowering clanging of a bell signals the start of the auction, you will not hear any price complaints from the Argentine intermediaries at Liniers about the price of the cattle. Here, the buyers act as intermediaries before the cows make their way to the slaughterhouse. Through this method, ranchers only get 20%, with the intermediary taking most of the profit. The meat taken from the slaughterhouse is then sold and distributed to various markets.
In addition to the global recession, which has hindered overall production, another cause is that more and more ranchers are turning over to cheaper, faster soy production. At Liniers, one even proclaimed “thanks to god!” for the reliable soybean.
According to Alberto de las Carerras, vice-president of Argentina’s Chamber of Exportations, the reason for the import speculation has to do with the trouble the meat industry has faced since 2006 when the government set minimum slaughter weights, export prohibitions, and price caps. The price cap was meant to keep meat affordable for Argentines.
“Due to these factors a sharp drop in meat production is expected, which could lead to importation from Brazil (the world’s leading exporter) and Uruguay,” he said.
He also says Argentina’s recent drought has caused cattle birth to decline. Since it began, many farmers and people in the agricultural sector have been worried that Argentina might have to import.
Last year, this combination of problems resulted in the campo crisis, a period where farmers protested against the government’s desire to raise taxes on exports by halting production. While the tax hike eventually did not pass, the previously installed government regulations have led to agricultural organisations calling for the government to change its export demands.
Four months ago, before the Kirchners’ defeat in the recent mid-terms, Carlos Cheppi, the Agricultural Secretary of Argentina claimed there was no crisis in the meat industry.
“They have set aside 14 million hectares to agriculture and we still have the same amount of animals. There is not a crisis in the meat sector,” he said in a press statement. According to the Rural Society of Argentina, however, about three million cows have been lost since September.
Now however, it looks like the government is making the effort to have a series of talks with agricultural organisations such as the Rural Society of Argentina (SRA) and the CRA. “In these days,” says Las Carerras, “they have announced that they will free the exportation limits for corn and wheat on one side and for meat on the other.”
According to him, the grain harvest for soy, corn, wheat, sunflower and sorghum reduced from 96m tonnes in 2006-07 to 35m tonnes in 2008-09. To change the dynamics of the meat industry, Production Minister Deborah Giorgri recently announced that they would change the amount of meat ranchers are required to sell locally from 65 to 35%.
Of these changes, Las Carerras says, “There is always the capacity to halt this once again if there is nothing left on the table for the Argentines.” CRA leader Mario Llambías recently said that he thinks the government policies are going in the right direction, but that now they are still insufficient, and that the CRA is awaiting new measures.
When asked at La Rural, several farmers had the same sentiment of uncertainty. They accused the government of stealing or being untrustworthy.
While combing her heifer, Berilos, Atoinette Huffmann, a rancher who has been participating at La Rural for 23 years said that living in a country where she has basically always experienced it in an economic crisis, ranchers learn how to get around the price controls. “We get paid the official price in white, and the difference in black and that’s it”, says Huffmann.
Recently, a political party in opposition to the current government, UCR, requested that the government released several statistics on agricultural production, which they claim has been hidden since the campo crisis last year. Such statistics include the grain harvest and the number of cattle slaughtered. Inaccurate numbers can be a serious concern since currently many farmers are forced to slaughter more reproducers.
Through this current round of discussions between the agricultural community and the government, perhaps an agreement can result where they can keep the traditions of weekly family asados and steak for both lunch and dinner alive.