Argentina: Export-quality beef prices have reached their highest level in a year, with meatpackers now paying 44% more than in Brazil.

The price of these steers, whether destined for the Hilton quota or the 481 feedlot quota, averages 7,500 pesos per kilogram of hook meat.

In terms of “meat dollars,” this cost is 5.40 per kilogram of produced goods, which is the highest figure for the year and, undoubtedly, one of the highest figures in recent history.

To arrive at this price, we need to use the wholesale dollar exchange rate at Banco Nación, which is used for export settlements, and subtract the 5% tax paid to the treasury. This results in a dollar exchange rate of 1,369 pesos for this sector.

In this context, the price paid by Argentine meat processing plants, as well as exporters who do not have their own plants, for bulls is the highest in the Southern Cone countries.

According to the Association of Producers and Exporters (APEA), the cost in UruguayThe hook price for goby is US $5.15 per kilogram, in Paraguay it is US$4.13, and in Brazil it is US$3.75.

The local meat processing industry pays 5% more for beef than the Uruguayan, 31% more than the Paraguayan and 44% more than the Brazilian.

This is partly due to the dollar's value, which has surpassed 1,500 pesos, but mainly due to a beef shortage. Argentina is short of bulls, forcing companies to pay prices that "no business can justify, especially now that the Hilton quota has been reduced by 10%," says Sebastian Castillo of the Abuelo Julio export group.

The price per ton of high-quality cuts exported to Europe under the Hilton quota is still very good at US$17,000 per ton, although this is down from the highs of previous months when it reached US$19,000/19,500.

Furthermore, China was forced to wait for the determination of protective measures, which was subsequently postponed until the end of January. Despite the postponement, port controls continue, leading to delays in meat imports and increased trade costs.

Meat exports had a rocky start this year, but profitability improved thanks to rising prices in various markets. However, industry leaders warn that the situation will worsen again by the end of the year.

This situation is leading to meat processing plants increasingly becoming "breadwinners," that is, taking on the primary role of breeding and fattening livestock in order to reduce commercial costs and, above all, ensure their own livestock supplies and, thus, become less dependent on producers.

In feedlots that provide services to third parties, 55% of cattle are owned by exporters, and this percentage is trending upward, according to the Feedlot Chamber of Commerce, while the remaining 45% are owned by slaughterhouses or meat processing plants for consumption, and this percentage is trending downward in cattle ownership.