Argentina: Rising meat prices doubled inflation in 2025 and will drive the consumer price index higher again this year

Meat markets will face a 2026 year characterized by shortages and a shift in the production cycle. After three years of inventory liquidation, reduced supply—estimated at 200,000 tons—and increased exports to Southeast Asia and Europe will fuel rising prices, which will once again exceed projected general inflation.

Meat prices ended 2025 with a nearly 70% increase, more than double the rate of inflation. The industry is expected to rise again in 2026, exceeding the consumer price index ( CPI), driven by reduced domestic supply, strong international demand, and the livestock conservation cycle. However, analysts rule out such a rise.

Meat prices have risen twice as fast as inflation.

"This year, the increase was 70%, which is twice the rate of inflation," noted Andrés Costamaña, director general  of the Argentine Society of Agriculture, describing the recent dynamics of meat prices. He explained that this phenomenon is due to a classic market combination: "Demand increases, but supply decreases."

Costamagna emphasized that meat has become a scarce commodity both locally and globally. "After the pandemic, there was a shift in trends, and protein consumption increased," he stated, adding that for years the sector "had been under significant pressure from environmentalists," leading to a decline in the global cattle population , which currently stands at approximately 920 million head.

Supply Shrinkage: Impact of the 2026 Livestock Cycle

On the supply side, the diagnosis is the same. In response to a query from Letra P, meat market analyst Victor Tonelli warned that "supply in 2026 and 2027 will be lower than supply in 2023, 2024, and 2025."

He explained that over the past three years, slaughter volumes have exceeded the equilibrium level, resulting in the loss of more than three million head of cattle, a figure that could reach three and a half million when data for the end of 2025 is available.

Economist Fernando Marull noted the current market price. "An Argentine salary can buy 120 kilograms of cattle per month. The average over the past 30 years has been 190 kilograms. A good price for Argentine cattle. It's finally paying off," he wrote.

Tonelli explained that following the October elections and a favorable international price environment, a shift occurred. "What used to be a liquidation cycle has now become a retention cycle," he noted, referring to producers' decision to retain cattle for weight gain and calf production.

However, the effect won't be immediate. "The biological cycle of cattle is very slow," Tonelli emphasized, estimating that annual beef production could decline by approximately 200,000 tons in 2026. If exports remain at current levels, this would mean a reduction of four to five kilograms of beef available per capita on the domestic market, approximately 10% less than in 2025.

High demand and exports are putting pressure on prices.

The supply squeeze is exacerbated by continued international demand. Costamagna noted that "demand is growing globally, led by Southeast Asia," and called trade agreements with the United States and the European Union-Mercosur "good news," although he acknowledged that "they put additional pressure on prices."

The village leader emphasized that "when exports increase, Argentines are better off because they are encouraged to increase production," although he added that increasing production takes time and capital. "Increasing production doesn't happen overnight, but it requires a return on investment," he stated.

The Impact and Limitations of Public Policy

To mitigate the shortage, the market will be forced to partially resort to imports. Costamagna predicted that "imports from Brazil will continue," estimating their volume at approximately 160,000 tons. "It will be very small, but it will be enough to cover the deficit," he explained.

He also warned that when supply fails to meet demand, the market "hedges risks," especially in conditions where government policies or uncontrolled inflation create obstacles to investment.

Prices, inflation and the macroeconomic drag

In the short term, meat price dynamics are driven by persistent inflation. According to the National Institute of Statistics and Census (INDEC), wholesale inflation, which serves as a leading indicator for the CPI, was 2.4% per month in December and is projected to reach 26.2% annual growth in 2025.

In its report, consulting firm LCG noted that wholesale inflation on goods has again fallen below retail inflation, indicating a recovery in profitability. It also warned that the new exchange rate system and wage adjustments could put additional pressure on prices in 2026 in a scenario in which disinflation continues, albeit at a slower pace.

What to expect in 2026

Against this backdrop, industry forecasts converge on one key point. "Meat prices will rise faster than inflation, but won't reach 70% as they did this year," Costamagna stated, predicting that "prices will correct in 2027."

Tonelli agreed that, with limited supply and very high demand, prices "will keep pace with inflation; they may rise further, but not by much." He concluded: "Growth rates like those seen in November and December cannot be sustained. There are other alternatives that do not justify such increases."