Rising beef prices push carnivores from Buenos Aires to California
By Agustin Geist, Tom Polansek and Ana Mano
BUENOS AIRES / CHICAGO / SAO PAULO (Reuters) – Beef prices rise around the world, removing meat from the steak-loving Buenos Aires menu and spoiling summer barbecues in the United States as imports Chinese markets are increasing and the cost of feeding livestock soars.
Globally, the surge contributes to the highest food prices since 2014, according to the United Nations Food Agency, hitting the poorest consumers particularly hard as they struggle to recover from the economic shutdowns triggered. by the COVID-19 pandemic.
Rising beef prices have been driven by growing demand from China, a limited supply of livestock in some countries, a shortage of slaughterhouse workers and rising feed costs. The trend is starting to shake supplier markets and impact politics.
Argentina, China’s second-largest supplier of beef after Brazil, suspended exports for a month on May 17 as it grappled with soaring inflation. He criticized strong Asian demand for reducing local supplies of beef and raising domestic prices.
“The price of meat has gone up very high, it’s crazy,” said Fernanda Alvarenga, a 38-year-old administrative worker in Buenos Aires.
She said she reduced her meat intake at home to just one day a week, instead of every other day. She also started making milanesa, a popular breaded meat dish, with a cheaper cuadrada cut of meat, instead of more expensive cuts of peceto.
âIt costs between 4000 and 5000 pesos ($ 42 to 53) each month to buy my meat. Before, for the same amount, you could get a lot more. “
Beef prices in Argentina, where barbecuing beef is considered a basic human right and the countryside is dotted with cattle ranches, have soared more than 60% in a year. Per capita consumption plunged, hitting a 100-year low in April, according to a report from the meat industry chamber.
Memes shared in WhatsApp chat groups lament just how unaffordable beef has become, including jokes that inflation has instead driven people to eating polenta – an ironic dig at government food aid efforts during the pandemic.
THE APPETITE OF CHINA
In the first four months of 2021, China imported 178,482 tons of beef from Argentina, up from 152,776 tons a year earlier, according to data from the General Administration of Customs of China.
Most of the imports are of older cows that are not consumed domestically, according to Argentina’s meat industry chamber, which opposes the government’s export ban. Farmers protested the ban by stopping the local livestock trade.
China increased its meat imports after a deadly pig virus, African swine fever, decimated its pig herd from 2018. More recently, Beijing suspended some beef imports from Australia, its third-largest supplier from 2018 to 2020, as relations between the two countries deteriorate. . Since then, Chinese importers have become more dependent on other suppliers.
US beef exports to China hit a monthly record high in March of 14,552 tonnes, according to the US Department of Agriculture, well above total shipments in 2019. A growing middle class in China is making room for beef in a diet that has been around for a long time. pork-based.
âThe beef was mainly eaten outside the home, such as in restaurants. But beef is increasingly popular for home cooking, âsaid Pan Chenjun, senior analyst at Rabobank.
Beef prices in China at the end of April were 4.4% higher than a year earlier, while pork prices were down 27.9%, according to data from the Chinese ministry of Agriculture and Rural Affairs.
Shipping beef to importers like China is more profitable for countries like Argentina and Brazil because of the depreciating currency and weakening local demand, said Upali Galketi Aratchilage, senior economist at the Food and Agriculture Organization of the United Nations. The result, however, is that higher exports can reduce domestic supplies, pushing up prices, Aratchilage said.
The United States and Brazil are still struggling to replenish national stocks of frozen beef, chicken and pork in stock after shipments to China surged last year, even as COVID-19 tore apart slaughterhouses, disgusting workers and hampered production.
“ ASTRONOMIC ” PRIZES
In Clovis, Calif., Retired Army veteran Darin Cross said he was shocked by 2-pound (0.9 kg) packages of ground beef sold for $ 10 at Walmart, up from 8 $ previously. The 55-year-old therefore eats more vegetables.
âFor those of us on fixed incomes, that’s a pretty big increase in just a few weeks,â Cross said. “My fear is that this will continue.”
The average unit price for U.S. fresh beef in April was up 5% from March and about 10% from a year earlier, according to data from NielsenIQ. Pork and chicken prices each increased about 5.4% from a year ago.
Outside of New Orleans, Tina Howell, 45, said she stopped buying steaks in bulk to fill a freezer at her home because grocers stopped offering sales. She noticed that New York steaks were selling for around $ 12 a pound, down from around $ 7 previously.
âThe prices are astronomical,â said Howell, who works in real estate marketing.
The higher prices benefit meat packers like Tyson Foods Inc, the largest meat processor in the United States by sales. The company said U.S. government stimulus checks were spurring windfall demand by giving consumers more money to buy food.
Although the supply of cattle in the United States is plentiful, beef production is constrained by a shortage of labor and the processing capacity of slaughterhouses, according to meat producers.
Meat processors face higher feed costs for livestock, with soybean and corn prices hitting high levels over the past eight years, and some are passing those costs on to consumers. Increasing demand from restaurants is also supporting prices as COVID-19 restrictions ease.
Nebraska-based Omaha Steaks, which sells premium beef, predicts U.S. demand will remain strong throughout the summer as people are prepared to hold larger gatherings and pay for high-quality food. said CEO Todd Simon.
Brazilian meat processors JBS SA and BRF SA, however, said they were struggling to pass higher feed costs to consumers in their home market, despite JBS having benefited from its operations in the United States.
The prices of some cuts of beef have risen by 30% in the past year in Brazil due to the tight supply of cattle and strong export demand, said Guilherme Malafaia, an official with the government agricultural research agency, Embrapa. Along with Hong Kong, China buys 60% of all beef exported by Brazil.
For Brazilians, however, high prices have pushed domestic consumption down 14% from pre-pandemic levels, to a 25-year low. Instead, consumers have turned to pork, chicken, and eggs, which are historically cheaper.
Per capita pork consumption in Brazil increased 5% while chicken consumption increased 6% in 2020 compared to the previous year, said Marcelo Miele, pork and poultry researcher at Embrapa. Brazilians now eat 251 eggs per person per year, the highest on record, he said.
Butchers are suffering from declining sales as some consumers cut back on beef or switch to cheaper meats.
As US prices for “medium meats” like T-bone steaks and rib eye steadily rise sharply, meat cutter Shawn Smith said more people are buying ground beef from his Albany store. Oregon.
Argentinian butcher Pablo Alberto MonzÃ³n, 26, said meat sales fell by a third at his store in a working-class neighborhood in Buenos Aires. Fewer and fewer customers are arriving and those who find that their money is not going far.
âPeople who previously could buy short ribs for the grill are now content with flank steak,â said MonzÃ³n.
(Reporting by Tom Polansek in Chicago, Maximilian Heath and Agustin Geist in Buenos Aires, Ana Mano in Sao Paulo, Rod Nickel in Winnipeg, Dominique Patton and Beijing Newsroom; Written by Tom Polansek; Editing by Adam Jourdan, Caroline Stauffer and Matthew Lewis)