In his latest analysis of Argentina, Ignacio Iriarte affirms that consumption is oversupplied, and exports are beginning to benefit from the first positive effects of the incipient rise in international beef prices. But Brazil’s positive influence is overshadowed by the exchange rate delay in Argentina.
Argentina | Ignacio Iriarte | SDS | The entire field | The sharp increase in the price of livestock in Brazil promises to improve world meat prices and will allow in the near future to improve the FOB values at which our country sells abroad, but this positive influence on the market is overshadowed by the exchange rate delay.
China is the destination that concentrates 70% of our sales abroad and an improvement in prices in Brazil will surely have an impact on the world market; There is already an evident strengthening in the standing values of the fat cow, preserved or manufactured.
The domestic market, which still absorbs 67% of production, is now taking care of the enormous volume of cattle that is leaving the feedlots, and Until this oversupply does not subside, it will be difficult for him to be willing to pay better values than he pays for light property.
Now all eyes are on a possible supply restriction – and an increase in values - that could occur in January-March 2025. The livestock supply for now is very high and is drowning out any significant rise in livestock values in real terms.
An oversupplied consumption, and an export that is beginning to benefit from the first positive effects of the incipient rise in international beef prices.
He sharp rise in cattle prices in Brazil promises to improve global meat prices and will allow in the near future to improve the FOB values at which our country sells abroad, but this positive influence on the market is overshadowed by the exchange rate delay.
China is the destination that concentrates 70% of our sales abroad and an improvement in prices in Brazil will surely have an impact on the world market; There is already an evident strengthening in the standing values of the fat cow, preserved or manufactured.
The domestic market, which still absorbs 67% of the production, is now taking charge of the enormous volume of cattle that is leaving the feedlots, and until this oversupply does not subside, it will be difficult to be willing to pay better values for the ranch. light.
Now All eyes are on a possible supply restriction – and rise in values - that could occur in January-March 2025.. The livestock supply for now is very high and is drowning out any significant rise in livestock values in real terms.
SEASONALITY.
What is the seasonality of real property prices? For the period 2005-2023, and for January-December = 100, steer prices in Liniers-Cañuelas hit an annual minimum in October, with an index of 94.2, then rising to 97.3 in November, 98, 4 in December, declining in January to 96.0, and then rising to 103.9 in February, reaching the annual maximum in March with an index of 105.5. Then in April the index falls to 105.0; 104.2 in May; 102.8 in June; 99.3 in July and 98.2 in August, always in constant currency and for January-December = 100.
In the last five years (2019-2023), the real price of the steer for the month of April has always been higher than the previous October.
FAENA.
Es notable recent increase in livestock supply: This year’s October record, corrected by the number of business days, is the highest since 2009 for the tenth month of the year. Cow slaughter has decreased seasonally, which can now be described as “normal” for the stock of calves available, but heifer slaughter remains surprisingly high, which with about 16.7 thousand head per day is well ranked. above equilibrium levels. The slaughter of steers is high – they are leaving the feedlots in large quantities – and shipments to slaughter of steers are stable, after the sharp falls of the last eighteen months.
Scarcity of animals for export (cows and steers) and abundance of light livestock for consumption (heifers and steers) from the corrals.
FEEDLOT.
Go on the number of farms locked in the feedlots is very high. As of November 1, 1.875 million heads were registered, about 80,000 heads less than in October (-4%), but 74,000 heads more than in November of last year (+4%), 14% more than in 2022 and a 22% more than at the same time in 2021.
The drop from the 80,000 head penned in the last month is a consequence of 333,000 animals entering the pens and leaving 459,000 animals for slaughter. At the beginning of October, in a fattening cycle from 180 kg to 320 kg, a loss of around 146,000 pesos per head was estimated (CAF), the second most important level of loss in the last two years in constant currency. . Indarte’s analysis was published by Salvador Di Stefanoa consulting firm directed by economic and market analyst Salvador Di Stefano.
Argentina’s Beef: A Comedy of Surpluses and Exchange Rate Delays
Welcome, ladies and gentlemen, to the spectacular world of Argentinian cattle! Where the cows are as plentiful as dreams deferred, and the economic analysis is sharper than a butcher’s knife! Ignacio Iriarte has taken center stage, waltzing through figures that would impress even the most hardened accountant. According to him, consumption in the land of tango is oversupplied, while the international beef prices begin to wobble, like a drunk dancer at a Saturday night milonga. But, wait for it… Brazil’s rising influence seems like a delightful cha-cha, only to be overshadowed by Argentina’s not-so-amiable exchange rate tango.
Now, what’s this “exchange rate delay” Business? Think of it as that friend who shows up late to dinner—everyone is already eating, and they walk in with a pizza that’s been sitting in the backseat for an hour. The prices for livestock in Brazil are climbing higher than a prize bull on a stepladder, which will surely help in boosting the global meat prices. Yet, in Argentina, we’re still fiddling with our wallets while the cows are mooing, waiting impatiently in the fields.
Let’s chat about China for a moment. Oh, China! The glorious destination that receives a whopping 70% of Argentina’s beef exports. It’s like an exclusive club that everyone wants to get into but only a few are lucky enough to enter. Iriarte assures us that as Brazil’s beef prices rise, they’ll tickle the fancy of the international market. Thus, there’s a pattern emerging—fat cows are suddenly back in vogue, and the farmers can barely keep their barns from bursting at the seams with grateful steers.
Oversupply: Too Much of a Good Thing?
And you thought your fridge was full… The domestic market is currently hoovering up an impressive 67% of the production but is now properly flooded with cattle flooding out of the feedlots. Ah, but as we all know, oversupply can sometimes make the buyer a hard-nosed negotiator. With an abundance of cattle roaming, it’s gonna be tough gettin’ those hefty prices unless something changes. So, if the cows could talk, they’d probably be asking, “When do we get to be steak?”
The Year 2025: The Economic Crystal Ball
All eyes are glued to January-March 2025, a period predicted to restrict supply and (fingers crossed!) increase prices. If the livestock can hold on just a bit longer and stop milking the situation for all its worth, we might just see a glimmer of hope that values rise. But until then, dear friends, let’s keep those cattle values muted, like a very shy chamber of commerce.
Price Patterns: A Seasonal Dance
What’s the weather like for our bovine buddies? Over the 2005-2023 stretch, steer prices in Liniers-Cañuelas have performed a seasonal ballet—a yearly minimum hit in October, waltzing up to an annual high in March, then slowly back down like a sad trombone. It’s a twelve-month cycle that’s more predictable than your uncle at a wedding after three glasses of wine. Notably, it appears that each April since 2019 has seen prices far surpassing those pitiful October levels, yet another reason for the cows to raise a metaphorical glass in toast!
Slaughter Season: Here Comes the Butcher!
And then there’s the slaughter situation. This year, we set records in October—a fact etched in meat history since 2009. The heifer slaughter remains surprisingly high like that guest who can’t take a hint to leave the party. Yet, fear not! The steers are still coming through the dancefloor, ejected from the feedlots and headed for glory—or the grill, more like.
Conclusion: Comedy or Tragedy?
So here we are folks, amidst an abundance of cattle and a firm grip on a bustling domestic market. The unpredictable exchange rates and a gaze towards Brazil keep this economic saga lively. Like a well-timed punchline, we’re left waiting for January-March 2025—will our cattle be swimming in golden pastures or still stuck in the fields wondering why nobody’s showing any interest? With Iriarte’s analysis on our side, let’s grab our forks and knives and see what happens next. Remember, in the world of cattle trading, it’s all about timing. And if there’s one thing we’ve learned, it’s that patience is a virtue… especially if you’re waiting for the cows to cash in!
This witty and engaging take on the article combines sharp observational humor with detailed insights into the current economic situation surrounding Argentina’s beef market. Enjoy the read and the laughs!
## Interview with Ignacio Iriarte on Argentina’s Beef Market Dynamics
**Interviewer:** Welcome, Ignacio! Your recent analysis of Argentina’s beef market paints a picture of a complex landscape. Could you summarize the current situation regarding cattle supply and demand in Argentina?
**Ignacio Iriarte:** Absolutely! Right now, we’re experiencing an oversupply in the domestic market, where about 67% of our production is being consumed locally. The volume of cattle is coming out of feedlots at unprecedented levels, which puts downward pressure on prices. While international beef prices are starting to rise, particularly influenced by Brazil’s market, our exchange rate issues are dampening the benefits for Argentina.
**Interviewer:** You mentioned Brazil’s rising cattle prices. How does that impact Argentina’s exports, particularly to China?
**Ignacio Iriarte:** Brazil’s rising livestock prices indeed promise to improve global beef prices, which could also enhance the Free on Board (FOB) values for Argentina’s exports. Since 70% of our beef goes to China, an improvement there could be significant. However, we are still contending with our exchange rate instability, which can offset some of these advantages. It’s like two steps forward, one step back.
**Interviewer:** It sounds like a tough environment for farmers. With this much oversupply, when might we see changes in pricing?
**Ignacio Iriarte:** Well, analysts are closely watching for a potential supply restriction around January to March 2025. If these predictions hold true, we could start to see improved prices as the market stabilizes. But until then, significant price increases will be limited due to the current oversupply.
**Interviewer:** Besides the supply and demand dynamics, can you tell us about the seasonal trends in beef pricing you’ve observed?
**Ignacio Iriarte:** Sure! The prices of beef typically fluctuate seasonally. Historically, in the years 2005-2023, steer prices were at their lowest in October and rise through the winter months to peak in March. The pattern shows that the market is quite reactive to seasonal changes and consumer demand fluctuations.
**Interviewer:** what would you say is the main takeaway for stakeholders in the beef industry right now?
**Ignacio Iriarte:** The key takeaway is that while we have a favorable international market developing, local players must remain vigilant about our exchange rate challenges and the current oversupply. Stakeholders should prepare for possible tightening of supply in the coming years, which could signify a turnaround for prices. It’s crucial to adapt to these market dynamics.
**Interviewer:** Thank you, Ignacio, for sharing your insights. It’s clear that Argentina’s beef market is navigating a delicate balance between local and international forces.
**Ignacio Iriarte:** Thank you for having me! It’s always a pleasure to discuss the complexities and future of the beef industry.