In mid-May, the president of Argentina announced the country would be shutting down their beef exports for 30 days. The move was intended to control the country’s rising inflation, which is close to 50 percent. In response, the beef industry threatened to suspend livestock trading.
By May 31, a total 12 beef exporters had been shut down by officials over “irregular” operations, and over 220 tons of beef were seized. The country’s agriculture department, the ministry of agriculture, said the companies were suspended after finding “irregularities such as not liquidating foreign currency or having registered false addresses, among other charges.” Additional companies are currently under investigation for similar actions.
Argentina is the world’s fifth largest exporter of beef and has ramped up exports in recent years, especially to China. The momentary lapse in exports could give the U.S. a leg up in exporting beef.
“While the immediate impacts of the Argentine government’s decision are short-term (assuming the ban is not extended), it has the potential to disrupt beef import and export supply chains and will likely place upward pressure on already elevated beef prices,” read a Market Intel report from the American Farm Bureau Federation (AFBF).
AFBF Economist Michael Nepveux noted in a podcast discussion that the ban is not uncommon for Argentina, who often uses agriculture as a political tool.
“Inflation within the country has been reaching, in some reports, up to 50 percent annual inflation for this year,” Nepveux said. “So, this is one of their attempts to help control and curb some of the price increases that they’ve been seeing and keep more of that beef in country, and, in their mind, hopefully slow down some of that food price inflation.” — WLJ
