Boom in beef returns opens the door to a bonus for Uruguay

Published on Monday 13 October 2008 22:17

BEEF from South America has been traded on the international markets for the better part of a century with Argentina and Brazil the big players in this field. However, in recent years Uruguay has become an increasingly important source of beef for the European trade, especially in terms of quality.

The population of Uruguay at 3.2 million is significantly less than that of Scotland, but its beef industry is much larger. In the first six months of this year Uruguay exported 141,300 tonnes of fresh and frozen beef to a wide range of destinations. The physical volume of exports was little changed on the previous year. However, the value of that trade increased by more than 50 per cent, reflecting the growing demand for beef.

Figures from the Banco Central den Uruguay reveal that shipments to the EU in the January to end of June period of this year increased from 16,400 tonnes to 34,400 tonnes with the UK taking in 10,200 tonnes – almost double compared to the same months in 2007.

Much of this increased business is clearly down to the near total ban on imports to the EU from Brazil amid concerns over foot-and mouth disease and a lack of traceability. Exports from Argentina have also been severely reduced as the government in Buenos Aires attempts to control domestic food prices through punitive taxes on farmers and the meat trade.

Exports of beef from Uruguay to Russia have soared with the first half of 2008 seeing an increase from 1,700 tonnes to just over 58,000 tonnes. For farmers and ranchers in Uruguay the past year has been a boom time with the price of cattle increasing by 42 per cent liveweight to the equivalent of $1.82 per kilo.

However, the US Department of Agriculture in its most recent analysis suggests that there is little prospect of an expansion in beef production throughout most of South America. Farmers have quickly latched on to the fact that there is more profit in growing soya and sugar cane, much of which is likely to be used in the rapidly expanding biofuels industry. That trend is likely to see beef prices throughout the world rising further.