Argentina’s unorthodox beef export ban is the latest disruption in supply chains that forces consumers to pay higher prices for meat.
The South American nation suspended beef shipments for 30 days as inflation approaches 50% per year. However, Argentina supplies nearly a quarter of China’s beef imports and the ban is expected to shake up global meat markets, including causing Chinese buyers to buy more from Brazil and the United States.
Meat prices have remained high since the Covid-19 outbreak sickened workers in meat factories, halting production just as consumers were preparing more meals at home. Beef prices may now remain high to account for an increase in exports and with more restaurants reopening and Americans grilling burgers and steaks during the summer barbecue season.
Already, the growing anger of American ranchers and consumers at soaring retail beef prices is creating political momentum in Washington to closer examination of the four companies that dominate the meat packaging industry.
“Withdrawing the No. 2 supplier from China for a month will cause prices to rise globally,” said Brett stuart, co-founder of Global AgriTrends, a consulting firm.
China has increased its imports of meat and feed to compensate for the decline in the pig herd due to African swine fever.
A possible diversion of Argentinian supplies could start to appear in the export data expected next week by the United States Department of Agriculture. Even before Argentina announced the ban, importers in China purchased about 9,200 metric tonnes of US beef in the week ending May 13, the highest on record.
Meanwhile, Brazil – the world’s largest beef exporter and China’s largest supplier – is expected to see larger shipments through May and the first half of June, said Felipe Fabbri, analyst at Scot Consultoria, based in Sao Paulo.
In the United States, wholesale beef prices have climbed for nine consecutive days, with prime meat priced at $ 323.52 per 100 pounds, the highest since last year at the start of the pandemic, data shows from the USDA.
– Michel hirtzer in Chicago
Beef could be the new coal, shunned by elite tasters because of rising temperatures and pressed for increasingly cheap alternatives. Americans claim to want a change: 70% say it would be healthier if the country ate less meat and 58% would like to eat more fruits, vegetables, nuts and whole grains, according to a 2020 company survey Datassential food market research. Climate concerns add to long-standing health concerns about red meat.
The essential readings of the day
- Food vs Fuel | Tackling climate change with greener fuels comes up against another challenge the world faces as it struggles to emerge from the pandemic: soaring food prices.
- Fertilizer subsidy | India has increased its subsidy for ammonium phosphate to protect farmers in the country, where around 60% of people depend on agriculture for their livelihoods, from the impact of more expensive imported raw materials for agricultural nutrients.
- Cattle boat | Uruguay, a major livestock exporting country, sees an opportunity to increase shipments of dairy and breeding cattle to China as New Zealand withdraws from the sea-based livestock trade.
- American cereals | China has tapped the United States for more than a third of expected corn imports for next season, stepping up the pace of buying from the world’s largest supplier to meet its growing grain needs. Meanwhile, heavy rains have prepared the American bread basket for a record wheat yield, although raising concerns about crop quality.
- Oat flour | It all started with a group of scientists and a crazy idea: that the by-product left over after making oat bran could be turned into non-dairy milk. It’s the founding of Oatly Group, the Swedish oat milk company that debuted in New York on Thursday after raising $ 1.4 billion in an initial public offering. The company is now considering vegan cheese as a new frontier for expansion in the burgeoning plant-based food market.
Construction costs | The cost of raw materials is so high right now that the third largest chicken producer in the United States, Sanderson Farms, is considering abandoning plans to build a new processing plant. – even as the company struggles to meet demand.
- Post-Brexit test | UK Prime Minister Boris Johnson has left open the prospect of a trade deal with Australia that would remove tariffs on food, despite warnings that UK farmers could be bankrupted by cheaper imports .
- Look at this | Netflix’s most recent documentary, High on the pork, teaches the culinary history of black Americans, from slave ships to the plains of Texas.
On the Bloomberg terminal
- Even sweeter | Cocoa futures prices could remain between $ 2,500 and $ 3,000 in the near term, limiting cost increases for confectionery makers as chocolate sales may not fully recover until 2022. This is due to prolonged lockdowns in the key European market and the out-of-home channel which accounts for around 40% of pre-Covid-19 consumption, according to Bloomberg Intelligence.
- Boost momentum | President Joe Biden’s recent backing for overtime pay for farm laborers – a right denied by federal law and in most states – signals potential traction for proposals that would grant broader protections, although one An uphill battle remains to overthrow a decades-old system, writes Bloomberg Law.
- Use the AHOY function to track global commodity trade flows.
- Click HERE for automated supply chain stories.
- See BNEF for BloombergNEF’s analysis on clean energy, advanced transportation, digital industry, innovative materials and raw materials.
- Click VRUS on the terminal for coronavirus news and data and here for maps and charts.
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– With the help of Fabiana Batista and Dominic Carey