David Richardson: Argentina’s beef decline
Liniers is the biggest cattle market in the world. In the suburbs of Buenos Aires, it attracts finished cattle from up to 400km (250 miles) away. It has the capacity in its railed pens to hold 40,000 head and, around the sprawling site, are the offices of more than 40 auctioneers.
I was last there 17 years ago. That day there were 28,000 animals to sell and, although locals said it was quiet, the place was buzzing with auctioneers selling from elevated walkways above the pens and mounted gauchos driving those sold along gangways onto lorries that later headed for a variety of meat-packing plants. This level of activity went on six days a week.
A few days ago when I went with a Farmers Weekly party to look round again there were 5200 animals for sale. Admittedly, there had been torrential rain the day before and some farmers were unable to bring their stock because their dirt roads were temporarily impassable. But even on a good day numbers now seldom exceed 10,000, we were told, and sales are held on only three days each week.
In short, the beef business in Argentina is a shadow of what it was. Yes, more animals are now sold on farms, but production is still down to the almost unbelievable extent that imports are being bought from neighbouring Uruguay.
Most of the packing plants that once supplied the world with corned beef have closed and the business transferred to Brazil.
Argentinean farmers explained why this had happened. Agriculture is the biggest industry in the country and when the economy dips, politicians look to farm commodities to bail it out.
Accordingly a 30% tax was imposed on farm exports. In the case of beef, in an effort to maintain domestic supplies and hold prices down, a tonnage quota was also applied.
Beef profitability and production have fallen and prices at the butchers’ have risen. So the government decided to subsidise production in beef lots – which had never previously featured in Argentina.
Beef-lot owners buy weaned calves and feed them for a couple of months until they weigh 260kg liveweight, at which point they are slaughtered and sold only to supermarkets. Each animal attracts a subsidy of about £50. But, as we observed on one 10,000-head operation, they are not much bigger than calves when they are turned into meat. What a waste.
Meanwhile much of the grassland, or Pampa, that surrounds Buenos Aires, which used to feed herds of Angus and Herefords, has been cropped with soya beans. Virtually all of it is genetically modified and it’s clearly the best game in town.
Argentina has become the second biggest producer of soya (after America) and, although hardly any is used in the country, there’s a ready export market, much of it to China. And it leaves a profit despite the export tax.
Growers are benefiting from the latent soil fertility left after countless years of grass and the crops we saw, green and well-podded, looked good. But then we came across figures on the area grown each year and it was obvious that a fair proportion of that land was growing soya every year. Aren’t you worried about diseases like sclerotinia? we asked. Why don’t you rotate your crops?
Because nothing else will show as much profit, we were told. And we can’t afford to worry about the long term.
We left Argentina somewhat depressed, deploring the unintended consequences of bad government. It felt a bit like home.