Mini-freezing of beef: they foresee little supply and increase in prices at the counter between now and the end of the year

The government negotiated with supermarkets a freeze for the long weekend and to talk again from Tuesday (Ionics)

The unusual decision by the national government to freeze beef prices in supermarkets over the long weekend will not change the picture or affect the upward trend in prices, market sources said.

Dardo Church, coordinator of the “National Meat Board” of the private sector, said he did not understand the measure. The announcement, he noted, only seeks to “calm the spirits”, but has no basis to really affect the market. In addition, sources from various sectors that make up the cattle and meat chain expressed to this medium the fear that there are more restrictive measures on beef exports.

So far it is unknown if national officials will convene the production, export and meat processing sectors to analyze the problem. It should be remembered that in recent days the Liaison Table raised a demand for an audience with Julián Domínguez’s minister, to reestablish dialogue after the legislative elections of November 14. One of the main demands that the leaders will bring will be the total liberation of meat exports.

The Government and several chains agreed to a mini-freeze given the difficulty of advancing in negotiations that guarantee that the increase in the value of the farm does not reach the counters of the butcher shops and the gondolas of the supermarkets

In the Liniers market, the average price of the steer climbed from $ 186.87 per kilo at the beginning of November to $ 221.57 (+ 18.2%) at the end of this Friday, while the price of the kilo of young steer went from $ 198 , 89 to $ 247.19 and the kilo of heifers from $ 190.74 to $ 237.13 per kilo, increasing in both cases 24.3 percent. There was strong pressure throughout the week exerted by the different purchasing sectors that needed to get merchandise.

Yesterday in the Liniers cattle market, prices registered moderate falls in all categories, thanks to a better offer that reached 9,175 heads. The General Market Index fell 1.88%, going from 201,034 to 197,250 pesos per kilo, and the Novillo Index fell almost 1.40%. Now if you analyze everything that happened during the week, the first of the indices rose 7.82% and the second 5.99%.

In the last hours, versions of possible calls that would have existed from government officials to market operators also circulated so that prices do not skyrocket. Something that made us remember the time of the former Secretary of Internal Trade in Kirchmerism, Guillermo Moreno, with its suggested price list in order to control the values ​​in Liniers.

In this scenario, the Secretary of Internal Commerce, Roberto Feletti, agreed with Coto, Changomás, Cencosud (Jumbo, Disco and Vea) Carrefour, La Anónima and Día%, among other chains, the commitment that prices do not vary this weekend, in which a strong tourist movement is expected. On Tuesday, talks will continue in search of a consensual solution that guarantees the stability of the price of meat and avoids shocks at the end of the year, a period of high consumption, due to the holidays.

In November, farm prices rose as much as they had not in the previous four months (NA)
In November, farm prices rose as much as they had not in the previous four months (NA)

Chiesa, however, commented that the sale of meat in supermarkets does not exceed 30% of the sale of beef throughout the country and weighs even less in the interior of the country. What is agreed for a weekend, he noted, “has no significance.”

Nicolas Torre, analyst of the Ieral of the Mediterranean Foundation, indicated in a report that “The rise of the farm in November augurs a greater retention of bellies in the coming months, with positive effects for the supply of beef during 2022-2023”. Before, of course, there will be a period of low supply and relative scarcity of meat.

Less work

During the fifth two-month period of the year (September-October) the meat processing industry reduced the slaughter level by 11.6% in relation to the same two-month period last year, according to data from the National Directorate of Agricultural Commercial Control.

“In a regional view, considering the accumulated work for 2021, a significant relative decline is observed in the activity for the refrigeration industry located in the interior of the country: La Pampa, Córdoba, Entre Ríos, Santa Fe and Cuyo “Torre pointed out. As a result, since the end of 2020 the price of the Hacienda in Foot in dollars / live kilo increased “significantly” and led to a decrease in the percentage of females in slaughter (averaged 43.4% between June-October) “.

From the official data it appears that Buenos Aires, the leader with 51.1% of the national slaughter, slaughtered 7.1% less heads in the first ten months of the year than in the same period of 2020. Santa Fe, second most important province; It fished 9% less, Córdoba, third, 11% less, Entre Ríos, fourth, 10.2% less and La Pampa, fifth national slaughter, 11.2% less.

Slaughter data for the first ten months of the year
Slaughter data for the first ten months of the year

That is why Torre predicts “greater retention of bellies in the coming months”, which will expand the supply of meat in 2022 and 2023, but will reduce it in the coming months.

The rise in the price of the farm, despite the “stocks” for the export of meat that allowed for 4 months a drop in the price of meat on the counters, could lead to a 20% rise in the price to the consumer here at the end of the year, market experts told Infobae.

The secretary of the Chamber of Slaughterhouses and Suppliers (CAMYA), Adriel Suelves, He specified that all categories of animals increased an average of 20% since the beginning of November, increasing in 15 days everything that had not risen in the previous 4 months, in which the value of the live kilo remained without great variations.

This is a scenario that the Government wants to prevent, resuming negotiations next Tuesday. If fulfilled, the long weekend freeze could have an adverse effect on official intentions: overstocking, in anticipation of future increases. If that happens, it will be even more difficult for Feletti to prevent prices from rising between now and the end of the year, a period of high socio-economic and political sensitivity.

In the last hours, versions emerged about internal crossings in the Government about possible measures to be adopted to lower the prices of meat at the counter. So far, implementing restrictions on exports, the Alberto Fernández administration has not allowed it to fulfill the central objective of the measure, beyond the fact that in the last 4 months there were falls in prices, but they were not significant.

Meanwhile, in the production sector they recalled that at the beginning of the export restrictions, last May, the sector had warned about a lower supply that was going to be registered due to the effects of the measure and that this was going to lead to a price rise. All this is happening at the moment, with inflation that continues to cause negative effects and a drop in the purchasing power of the population. The problem, say the leaders of the field, is not solved with price controls, but with an economic plan that generates predictability and orders the macroeconomy.


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