ACCORDING to Argentine newspaper Buenos Aires Times, the suspension on beef exports could be lifted this week.
In an article published on Sunday, the Argentine government represented by its Productive Development Ministry is reported to have been in discussions with the beef production sector and close to an agreement.
In a radio interview last Thursday, Minister Matias Kulfas spoke of a new set of rules being finalised that would see a greater volume of meat guaranteed for domestic consumers.
Once agreed, the way would be open for exports to resume.
Foreshadowed in this column back in April, the Argentine government announced a 30-day suspension on export beef sales on May 20.
That move should not have come as any great surprise.
Under the pro-business economic policies of Mauricio Macri elected to the presidency in late 2015, the beef export controls of the previous administration were promptly axed.
But unfortunately Macri's policies resulted in a plunging peso, rampant inflation and a rising number of people living below the poverty line.
In consequence, Alberto Fernandez outed Macri in Argentina's 2019 election and took over as president.
He subsequently flagged the possibility of reintroducing some form of price control for the local market.
While there is little detail at present, the BA Times article suggests the government position is for a priority quota of traditional consumer beef cuts for the domestic market at affordable prices.
As Mr Kulfas described it, the aim is to guarantee that the tables of Argentines are supplied and that the export business may continue.
However the deal is by no means assured as reservations have been expressed by major industry group CARBAP.
The Rural Associations Confederation of Buenos Aires and La Pampa represents a large swathe of Argentina's land owners and farmers in the country's most important agricultural region.
They brought on the nine-day halt to livestock marketing when the export suspension was announced and warned that similar action remained on the table if government did not listen to producers.
Some government officials are also concerned that it is a little early to be talking about a done-deal as the proposals brought to the table by CARBAP are still not acceptable.
To some extent the problem of export demand taking beef off the domestic dinner table is of the government's own making but more generally it has a lot to do with Argentina's export markets coming into realignment at a time of strong global demand.
Blinkered by the rapid growth in demand from China, the government announced in November 2020 a $187 million upgrade to Argentina's processing and cold chain infrastructure which they claimed would allow a significant increase in exports over the next three years.
But the export ball was already on a roll.
Japan had relaxed its restrictions on beef from Argentina's Patagonia province in July 2018 and the US opened more widely to Argentina later the same year.
Then in February this year, Mexico agreed to restart imports of Argentine beef ending a 20-year lockout after detection of foot-and-mouth disease in 2001.
As well, Argentina is set to benefit from the EU-Mercosur agreement (should it be ratified) which entails a shared allocation of 99,000 tonnes of beef at a preferential tariff rate.
The seductive appeal of a burgeoning beef export sector may have blindsided the government to the essential question of where all that beef was going to come from but now it seems they think they have the answer.
Minister Kulfas said in a television interview that the intention is to increase cattle breeding to take current beef production of three million tonnes up to five million tonnes with three million guaranteed for local consumers.
In the meantime the proposed priority quota of traditional beef cuts (called 'national cuts') will supposedly be off limits for export.
But even before the deal is spelled out in ink on paper, there is talk of exemptions allowing some beef cuts to go to China and Israel and other hard-won quota markets.
According to the BA Times, Israel's ambassador to Argentina, Galit Ronen, warned that if Argentina is not going to sell beef to Israel on a regular basis, the country will look elsewhere.
Despite that kind of market pressure, the beef production sector is reportedly fearful that exports will not be fully reopened leaving a cloud hanging over possible return to the export quota controls and taxes that decimated their industry before the installation of the Macri government.
Grid rates steady
NO adjustments in grid rates this week following the 5-30c/kg increases in ox and cow rates of a week ago.
In south-east Qld, 4-tooth ox remain in a 655-685c/kg spread while heavy cows are covered from 610-625c/kg.
At Wagga and Naracoorte, ox are quoted at 695c with heavy cow between 620-640c.
On the supply side one operator mentioned the past four to six weeks had seen good numbers on offer from north and north-west Queensland.
This coincides with many properties well into and in some instances already through their first round musters.
While mostly cows, the first of the bullocks out of the Channels were also put up last week.
As to numbers of bullocks that might be there this year, the best guess seemed to be a lot fewer than we would like to think due to the strength of the feeder market.
On that matter, the Riverina saw 510c/kg put up for heavy Angus feeder steers yesterday but the sentiment was that it would not necessarily buy a lot of cattle.
In the US, the imported lean beef trade was described by Steiner as slow with strong competition coming from other markets.
Indicator 90CL Aust/NZ blended cow was quoted at US1c/lb off at US281c/lb FOB East Coast.
Domestic 90CL however is still on a rising trend at US275c/lb, well above the general level for this time of year of US215-230c/lb prior to COVID.
