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Argentina market impressive

Jan. 30, 2014 | 0 comments

BUENOS AIRES

               It was gorgeous and sunny Friday morning in Buenos Aires when 40 participants in an agricultural tour of Argentina pulled into the circular driveway of Liniers Market, the major livestock trade center of Argentina. Founded in 1901, Liniers Market claims to be the largest in the world and is located in the heart of Buenos Aires.
              

               White wooden fences encompass this 86-acre facility. The first thing you notice is how clean it is. No flies buzz around your head. And the pens – built on concrete and brick bases-are relatively free of manure. Also noticeable is the lack of noise: no calves bawling for their mothers, and no mothers bellowing for their calves.

               With a trade area ranging as far as 125 miles, only cattle have been traded at the sprawling facility.

               Escorted by Dr. Patricia Cotado, a doctor of veterinary medicine in the region, the group walked over the catwalks, viewing the scattered pens of cattle. Down below, workers on foot were quietly moving cattle using sticks with plastic bags tied on their ends. There was no sign of electric prods.

               Five days a week cattle are sold for slaughter at this facilities. With a capacity of 30,000 head, sales average 10,000 head a day.

               A staple of diet and social life in Argentina, the per-capita consumption of beef is about 150 lbs.

ORGANIZED MARKET

               Most cattle arrive at the facility the day before sale. Cotado says in the past the trucks, about 300 of them, parked on city streets but in recent years the market has provided a spacious parking facility.

               Brands are required, and the cattle are weighed upon arrival and identified by owner, source, number and sex. Cattle eligible for export must carry an official, lifetime tag. Health inspections conducted by government-affiliated health officials occur at both the auction market and slaughter facilities.

               All cattle are weighed at entry into the facility, with an official pay-weight taken after the sale has been gaveled. There are25 brokers in this facility. Much like a stock exchange, these members buy a seat and the right to buy and sell cattle for their clients. Any producer can market cattle at the facility but must do so by calling ahead to consign with a commission member.
              

               The buyers walk from pen to pen with the auctioneer. When the auctioneer reaches the high bid, he slaps his stick on the rail and the group moves to the next pen. A runner reports the information by phone to the central office, and the info is entered into the facility's main computers. Prices here tend to set the mark for the rest of the country.

INFLATION AN ISSUE      

               “Time is an issue because of inflation,” Cotado says. “Sometimes an animal sells for less just to get the money right now. Some cattle are sold sixty days earlier than they are ready because the rancher is afraid of inflation. Cash on the spot is important.”

               The government says inflation is officially at 8% but the unofficial rate is more like 20% she says.  There is about 10 percent unemployment in the country that used to have a big middle class but now has 52% at the poverty level.

               Most of the cattle that come to the facility are grass-fed finished steers, weighing between 800 to 900 pounds.

                In the U.S. grass-fed beef is a specialty item that you might have to ask a butcher to special order or consumers buy directly from the grower. In the U.S. it is more economical to finish beef with corn on a feedlot.

                In Argentina, raising grass-fed beef is done simply because there it is cheaper. With abundant land, it is more economical to send the cows out to pasture and slaughter them once they're large enough. And that's the way it's always been done. 

               Cotado told the group that Angus/Hereford crosses are highly coveted by buyers, and purebred Angus or Hereford typically go for export.

               All cattle are sold for slaughter. The sold cattle are moved by truck 20-40 miles to slaughter plants.

               Some commission companies represent the sellers; some represent the packers. The seller pays a 4% commission to the market. The auction company represents the farmer. If the buyer doesn't pay, the auction company has to. All sales are also subject to a value added tax of 11 percent and brokers get 8 percent.
               
               When the cattle leave the farm they must travel with two certificates. One is for health, and the other is for taxes and brand certification. A computer keeps track of the cattle from arrival through departure.

               Once the cattle are auctioned, mounted gauchos (cowboys) move the cattle on to the scales for final payment weight. Horses used at the facility are a cross between Spanish Creole and Arabian blood.

               Though this market seems very large, Liniers handles only 15% of Argentina's daily cattle sales; the other 85% sell via local auctions or directly from rancher to packer. Only a small amount is slaughtered by the farmer.

GRAZING POPULAR

               Argentina's geographic position makes it ideally suited for raising livestock. In most areas of the country, cattle and sheep may graze year round. Livestock accounts for about 85 percent of exports.

               Nearly 5 million tons of meats (not including seafood) are produced in Argentina.  Cattle are raised in the provinces of Buenos Aires and Santa Fe.

               Beef accounts for 3.2 million tons and is followed in importance by chicken with 1.2 million tons; pork with 265,000 tons; and mutton, over 100,000 tons. 

               Argentina is noted for its horses and has an international reputation for producing exceptional racing and show horses. There are some 3.3 million horses in the country. Besides producing thoroughbreds for competition, there is also extensive use of horses on ranches and farms as work animals.

               The dairy sector is one of the strongest segments of agriculture. In addition to milk and cheeses, a number of novelty products are produced.

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