by Carlos Petroli
La Voz del Interior
May 10, 1997
After a prohibition of more than 60 years, the American consumers will again taste the qualities of the Argentine steaks. It will happen next week in an international fair which will be opened in the city of Chicago: from Saturday, a group composed by producers and exporters will be present in the fair which will constitute an advance in the quota of 20 thousand tons that the US has guaranteed to export, apart from the traditional purchases of corned beef imported from our country.
Javier Martínez del Valle, general manager of the Argentine Chamber of Producers of Cattle Meat, in a meeting which joined more than 500 businessmen and technicians in the field on the experimental stage of Inta Manfredi said yesterday to La Voz del Interior that "This is a milestone, because since 1930 Argentine fresh meat had nor reach the US and this is going to be the virtual landing".
The meeting was destined to analyze the technological and financial aspects of the business, trying to get the integration of the different actors as links of this chain of agroindustrial production.
"We have lots of expectations because this is the possibility to reach a market again and to do it with strength". Martínez del Valle asserted this when he mentioned that, in this case, they will focus on a segment which offers a great potential, as it is the commercial chain for the consumption of hotels and restaurants.
In the Chicago fair, there will be grills so that the public and the experts, owners and managers of restaurants can taste the cuts.
"The meat was already prepared for 30 days and the shipment will be done next week by plane; the bullocks were screened so as to cause a good impression. This first group will be composed by the best Argentine meat, without brand. Afterwards, each exporter will be able to advertise his own products", expressed Martínez del Valle, who guaranteed that in the following weeks we will know the final permission of the American authorities to open this market.
As well as Martínez del Valle, Hernán Wallace, officer of Procar (Program of Promotion for the Exports) said that the possible impact the American market has over the levels of prices of the domestic farming in the following years, will depend on the way Argentina could "launch" its products in the US, depending also on its marketing effort.
He expressed that "As long as the Argentine meat is commercialized more and more as a special product in the non-aphthous market (US, Japan and Korea), it will have a greater impact over the price of cattle".
According to Wallace, Argentina has more possibilities than the other countries, due to its productive potential. Something important related with this is the great loss of Australian competition caused by their inability to sell individual cuts, because they do not have an alternative market for the remainders.
Besides, there are important Argentine business projects in process with the intention of gaining a position in the high quality meat sector in the US. Some of these are based on the real Argentine taste which is obtained by cooking it with firewood. The technician warned that "Undoubtedly the effects will fully appear in some years".
About the same topic, Wallace considered that the effect over the farming prices of the permission of the American quota will not be seen this year, because at the beginning most of this quantity will be composed by low priced meat (bull, cow, talon and remainders). Yet, he considered important that from September they expect a price increase in the American market, which will make the export of meat without high added value even more attractive.
Current reality shows that in the United States the market is managed by -just a few- small companies, with an enormous marketing power. On this basis, the country experimented a great growth in the exports of high added value and in imports of meat for industry.
Australia as well as New Zealand, and our neighbor Uruguay, could not reach the American market with high quality cuts. What is more, the US are displacing Australia from the markets of Japan and Korea. This information shows the context of competition that Argentina will have to face in the following years, even though it is already in the first stage.
Rising perspective for the prices of cattle
A fall in the offer combined with the biggest demand of the principal export markets will be a detonating cause for an improvement in the prices of the cattle in the second half of the year.
This was a short-term perspective that Hernán Tomás Wallace, technician of the Program of Promotion for the Exports (Procar) of the Secretary of Agriculture, showed in the meeting which took place yesterday in Inta Manfredi.
"The principal variable of the market of meat in this moment is the lack of offer of animals, in the market of dairy cattle as well as in the market of beef cattle", indicated Wallace, who set the fall in the farming stock of the last two years in 3.5 to four million of heads, with a percentage of female in the slaughter of 43 per cent in 1995-96.
He observed that in 1996 the price of bullocks registered an average increase of nine per cent, with a slight reduction in the internal consumption. And the average of the first four months of this year was 2.5 per cent over the same period of the previous year. Following this way of thinking, he mentioned that "a good portion of the increase due to lack of offer, which was emphasized by the drought, already occurred, weakened by a considerable fall in the export prices".
Wallace estimated that in the following four months we can expect stable values, in the current levels (84-86 cents) or slightly lower than that, because the bullocks born in 95 "which was a very good year" will be available and with slaughter number similar to last year¹s.
The rest of the cattle, he indicated, will be seen as from August, moment from which we will have to expect values (between September and December) around 90 to 92 cents the alive kilo.
The principal lack of offer in the following months is referred to the "extra factor": the decrease of 10-12 per cent of beef cattle (heifers in the second half of the year and bullocks in 1998).