Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

Virus Chaos at U.S. Plants Lets Argentina Back In the Beef Game

Published 05/06/2020, 18:58
Updated 05/06/2020, 19:27
© Reuters.

(Bloomberg) -- America’s meat-processing woes opened a window for importers, and Argentina has pounced.

Beef shipments to the U.S. from the proud South American ranching nation jumped to 1,290 metric tons in April, the latest U.S. Department of Agriculture data show. A year ago, U.S. importers bought a measly two tons.

April is the same month that outbreaks of Covid-19 among U.S. meatpacking workers triggered a wave of shutdowns that tightened local supply and sent prices rocketing.

To be sure, Argentine beef exports had already begun to pick up under President Mauricio Macri, who left office in December. Macri negotiated access to the U.S. market, which re-opened to Argentina in late 2018, ending a ban that began in 2001 after an outbreak of foot-and-mouth disease.

Exporters needed time to set up distribution networks to supply top-end American restaurants, hotels and caterers, which wanted quality cuts, said Miguel Schiariti, president of Argentine beef industry and trade group Ciccra.

Shipments started flowing in the second half of 2019, but they surged in April amid the processing logjam in America. While U.S. plants have reopened, they are yet to return to full capacity. Argentina accounts for just 1% of total U.S. imports.

“Argentina was able to take advantage of the supply shortfall,” Schiariti said. “This could be an opportunity to plant a flag.”

Read More: Meat Plant Virus Rates Topping 50% Are Behind Grocery Shortages

Even under President Alberto Fernandez, who prefers intervention over Macri’s free-market approach, the nation’s beef export boom seems set to continue.

Some anecdotal evidence lies in the arrival this week, despite a ban on international travel, of almost a hundred rabbis from Israel to certify Argentine plants as kosher, according to Infobae. Exports of Argentine beef climbed 18% in the first four months to 162,000 tons. China is the biggest buyer.

Neighboring Uruguay also benefited from shortages in the U.S., said Marcelo Secco, head of meatpacker group Adifu. Shipments that cleared customs in April were 3,760 tons, the most since July 2019, according to the USDA.

Brazil’s ability to capitalize was limited given it was only recently cleared to resume fresh-beef exports following safety concerns dating back to 2017.

©2020 Bloomberg L.P.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2024 - Fusion Media Limited. All Rights Reserved.