LOWER WORLD BEEF PRICES?

Press, Volume CV, Issue 31042, 23 April 1966, Page 10

LOWER WORLD BEEF PRICES?

“The Argentinians will be putting more beef on the market over the next year or two and this will soften world beef prices in the near future,” say Mr R. J. Townsley and Mr R. W. M. Johnson, research officers in the

Agricultural Economics Research Unit at Lincoln College, in a bulletin on the Argentine beef cattle situation.

Mr Townsley and Mr Johnson have been studying the effects of droughts and inflation on the exports of beef available from the Argentine. As the preface to the report says: “There have been many suggestions in the last year or so that New Zealand should encourage a rapid increase in beef production because of the high prices prevailing for beef in world meat markets. High prices for beef are caused mainly by lower exports from Argentina and it is important that we assess the ' relative permanence of these prices. Are high beef prices simply due to a temporary cycle in Argentine production or has beef become a permanently expensive meat?”

The report shows that Argentine exports have fluctuated from as much as 60 per cent of world exports in 1938 down to 20 per cent in the period 1952-54. In recent years Argentine beef exports rose to 40 per cent in 1958, then dropped to 30 per cent in 1962 and rose again to 35 per cent in 1963.

These fluctuations have been due to a combination of two factors.

Firstly, droughts have occurred every five to seven

years in the Argentine since the war. These have forced ranchers to sell off stock, even in an unfinished state. It takes some years for breeding stock to recover. Secondly, inflation and increased wage policies of the government have encouraged local demand for beef within the Argentine. The big export packing houses have been forced to compete for supplies with local abbatoirs. The Argentine Government, concerned about its overseas funds, introduced beef rationing in 1964 by decreeing “beefless days.” For two days a week, butchers are not allowed to slaughter, carriers to transport, or restaurants to serve beef. With the help of these measures, local consumption has fallen from 98 kilograms a head in 1956 to 61 kilograms a head in 1964.

“At the present time the Argentine is in the buildingup stage of its beef cycle,” said Mr Johnson. “Production and exports were a record in 1963, following the 1962 drought. But in 1964 and 1965 ranchers held back all young stock. Consequently production and exports have declined to low levels. At the moment (end of 1965) slaughter rates have not yet recovered, but we predict that more finished steers will come forward by the end of 1966. In the next two years (1967 and 1968) we think that export levels will be some 40 per cent higher than they were in the period from 1964 to 1965. Thus we may expect somewhat lower prices, even with rising world demand for beef, when these greater supplies come on to the world market”