Steak prices prove big beef in Argentina

March 5, 2008

Rising beef prices are a touchy subject for steak-loving Argentines, so President Cristina Fernandez de Kirchner must be none too pleased to see the issue making headlines just a few months since she took over from her husband.

Local newspapers have reported price rises of up to 15 percent in recent days, saying the subject has dominated meetings this week between the president and her economic team.

It is not yet clear which path she will opt for. What is clear, is that a welter of measures taken by the previous government – led by her husband — have failed to keep a lid on the cost of the nation’s favorite food.

She could impose a fresh cut to export quotas, or a subsidy scheme for meat-packers so they sell cheaper to butchers.

Any new caps on foreign beef sales will draw criticism from the country’s disgruntled ranchers, who had few kind words for the farming policy of Fernandez’s husband, and such policies further threaten the country’s historic status as a leading beef supplier.

Cattle ranchers are sending more and more young animals and breeding cows to slaughter to make way for more lucrative grains crops, raising fears the country’s herd could shrink just as demand surges.

Racing economic growth means Argentines are going back to beef, which became too expensive for some during the economic crisis of 2001-02.

But subsidizing local consumers is also controversial. “There’s no point in subsidizing filet mignon for the rich guy … who then goes to Europe and pays 50 euros for an Argentine steak,” Ulises Forte, vice president of the FAA farming association, was quoting as saying in daily La Nacion.

He said the cheap cuts should stay at home, with the finest beef reserved for the lucrative foreign market — a policy pursued more closely by neighboring Uruguay.

Even if prices have shot up in recent years, the customary weekend barbecue shows no sign of disappearing. Argentines are still the world’s biggest beef-eaters, consuming nearly 70 kg (154 pounds) per person last year. 

In a country where the barbecue is seen as a birth right, President Fernandez will want to do everything possible to keep it that way. 
    

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