The Argentine beef industry is currently experiencing contrasting trends in exports and domestic consumption, where rising exports are offset by declining domestic consumption. The heavy reliance on the Chinese market presents both opportunities and challenges, with increased export volumes coming at the expense of lower prices.
Bone-in-beef exports rose significantly in Feb-24, with volumes reaching 82.5 thousand metric tons (mt), indicating a 6% month-on-month (MoM). The combined effect of increasing exports and falling production led to a significant decrease in domestic beef consumption. Per capita consumption levels in Feb-24 were the lowest recorded in a single month, at 41.78 kilograms (kg) per year, reflecting a 15% year-on-year (YoY) decline. While annual consumption remains above 50 kg/year (higher than the 2001 average of 49 kg/year), the trend suggests a potential breach of this threshold in 2024 if low domestic demand persists.
Despite the increase in exports and a reduced domestic supply, beef prices on the domestic market exhibited a moderate rise (+5% MoM) in Feb-24, significantly lagging behind the general inflation rate of 13%. This indicates consumer purchasing power limitations impacting their ability to absorb price increases. The surge in beef exports is primarily driven by rising demand from China, which is particularly evident early in the year. However, this increased volume comes at the cost of lower prices, with China currently paying 20 to 25% less for various beef cuts compared to last year. Notably, China represents 80% year-to-date (YTD) of Argentina's total beef export volume.
According to the Argentine Meat Export Consortium (ABC), Argentine beef export volumes reached 129 thousand mt in the first two months of 2024, reflecting a 24.5% YoY increase. This growth was accompanied by a 14.7% YoY rise in export revenue, totaling USD 486.7 million.
China maintained its position as the primary destination for Argentine beef, accounting for 79.5% of total export volume YTD. However, the average export price to China stood at USD 3,380/mt, reflecting a downward trend compared to previous periods. Despite the volume growth, the average export price of chilled and frozen beef fell by 3.8% MoM and 9.6% YoY in Feb-24.
Shipments of chilled boneless meat to Europe increased by 29.4% MoM in Feb-24. Additionally, Israel emerged as the third most relevant destination in Feb-24 with significant volumes of certified Kosher meat shipments. The United States (US) market witnessed stable chilled meat shipments and a slight increase in frozen meat exports, but prices declined in both categories. Conversely, shipments to Chile significantly declined, with boneless chilled meat exports dropping by over 40% YoY.