Analysis Cattle & Beef
Succes Argentine beef export has its downside
The Argentine beef export has achieved its strongest result in the first half of 2024 since data has been kept. Part of this success is due to strong sales in China. However, there is also a downside. Due to low production, the strong export is only possible due to the historical low point of domestic consumption.
Export figures have been tracked on the Rosario Stock Exchange since 1990. From that year, export volumes have never been higher than they are now. The total export volume was 454,711 tons of beef. That is an increase of 10% compared to the first half of 2023. Compared to the last five years, exports were 18% higher.
Higher export percentage
This is remarkable, as production has decreased by 10% due to drought, to the lowest point in 26 years. This increased the percentage of Argentine beef exported from 25.6% to 30.6%. There are two sides to this increase. On one hand, it is a success story. Argentina has managed to attract new markets. China in particular imports significantly more Argentine beef. China's share increased to 57% of total exports.
The devaluation of the peso against the dollar by more than 50% earlier this year certainly did not hurt. This move significantly reduced the price of Argentine export products. Because the difference in the value of the peso was about twice as high as the value paid on the black market for the currency, President Javier Milei decided to halve the value of the currency.
Weak domestic demand
However, the large exports are also the result of a sharp decline in domestic consumption. Due to high inflation, more and more Argentines say they can no longer afford to eat meat every day. This is directly reflected in the numbers. In the first seven months of 2024, Argentine beef consumption dropped to 1.248 million tons.
This is a decrease of 14.1% compared to the same period in 2023. If consumption continues to develop in the same way for the rest of the year, per capita consumption this year will drop to 44.8 kilograms. This is the lowest point since 1918 when beef consumption was first recorded. The historical average Argentine beef consumption is 73 kilograms per capita.
