Argentina: Livestock numbers haven't recovered since 2018

Without a doubt, the climate factor has been the most important factor in the decline observed in the last two years. However, an analysis of the dynamics of livestock numbers over the cycles reveals a downward trend since almost 2018, when Argentina barely recovered by 55 million HEAD after the initial sharp decline that ended in 2010.

Thus, in addition to the recent drought, it is necessary to take into account other factors that influence the process of stagnation and loss of livestock that Argentina has been experiencing in recent years.

In this regard, following the sharp decline in livestock numbers following the 2008/09 drought, when around 10 million head of cattle were lost , there was no specific national programme to support the sector to restore these numbers. On the contrary, this was followed by years of interventions and trade restrictions that severely limited and slowed down production growth, and in recent years this has been exacerbated by serious macroeconomic imbalances, which have ultimately created a very unfavourable scenario for the recovery phase.

In this context, the drought that has engulfed much of the country over the past two years has taken a heavy toll on an already battered sector, hitting the very heart of the country's livestock industry.

The provinces of Buenos Aires, La Pampa, Cordoba and Santa Fe lost more than 850,000 head of cattle last year, accounting for 75% of the national loss. These are the provinces that contain about 65% of the national herd, but due to their high productivity, they provide 70% of the total number of calves produced each year.

Indeed, this year the number of calves registered in the herd is 14.6 million, which is practically unchanged compared to the figures of the previous cycle, but far from the 15.1 million registered in 2022. Positive data in this sense are the small improvements achieved in the calf/cow ratio, always measured by the number of calves of the previous year.

This figure, at 65.2% in 2024 , represents a slight improvement over the 63.8% recorded in 2023 and is the second-best in the series after the 66.7% achieved in 2022.

Bull Stocks Fall

However, in addition to the achieved number of calves, there are still categories that have not yet gained momentum. The most significant case is the herd of bulls, where the decline in numbers is already structural: from 4.7 million heads registered in 2007 to 2.23 million heads recorded in this latest herd. In fact, last year the cattle herd lost almost 100,000 bulls, which not only did not soften the decline, but was the sharpest drop in the last seven years.

These data highlight the serious challenge facing the sector in terms of increasing MEAT production in an increasingly limited livestock population. Ultimately, we are faced with an equation that inevitably requires the restructuring of these heavier categories of animals, but which is extremely difficult to stimulate in such volatile and unstable conditions as the Argentine livestock sector has had to endure in recent decades.

However, in addition to bulls, there is another category that is on high alert and whose decline cannot be ignored. These are heifers, an important category for supporting cow replacement in production, whose numbers have been declining since 2017 and whose decline has accelerated in the last two cycles.

In 2024, annual heifer slaughter exceeded 4 million head from a total opening herd of 7.36 million head, representing a 54% reduction from the initial herd. As a result, and coupled with the apparent decline in calf replacement rates, the heifer herd ended last year down 475,000 head to a final figure of 6.88 million head, further and further from the 8.25 million head recorded in 2016.

Something similar is happening with cows. Although the rate of slaughter has generally slowed compared to 2023, when the recent drought saw the peak of liquidation with almost 3 million cows slaughtered, and in 2024 it was 2.62 million, the truth is that the downward trend in this category has not yet been reversed. The cow population at the end of last year was 22.08 million, down some 324,000 from 2023 and down 924,000 from the 23 million reached at the end of 2022.

In short, Argentina's cattle industry has lost more than 1.7 million cows and heifers in the last two years of severe drought. This figure, expressed as lost potential production, translates into nearly 1.5 million fewer calves and heifers over the last two years.

Finally, looking at the current commercial cycle and the much more favourable environment than we have seen in the last two years, the data on continued high levels of slaughter, particularly in the young female category, is a worrying sign.

While overall slaughter figures for the first quarter of the year, with 3.2 million head slaughtered, represent a 2.4% slowdown compared to the previous year, the number of heifers included in that slaughter remains high.

In the first three months, heifer slaughter increased by 7% compared to the same period last year and amounted to about 980,000 heads, which is almost a quarter of the total slaughtered for the entire year.

In the most general calculation, it can be said that, based on a calf population (7.29 million), practically unchanged from the previous year, and assuming similar mortality and reproduction rates, heifer slaughter must be reduced this year by at least 475-500 thousand head (12%) compared with the 4 million recorded last year, in order to avoid a further reduction in the final population.

In particular, this will be a very important piece of data to check in the coming months. If, as a neutral stock hypothesis, we assume that annual slaughter should remain at around 3.5 million heads per year, of which 980,000 have already been counted in the first three months, then for the remainder of the year (April to December) the average monthly slaughter should be around 285,000 heads, 17% below the average recorded for the same months a year ago.