Steakhouses are dotted across Argentine cities, where diners can indulge in a meal accompanied by a glass of Malbec wine. At lunchtime, construction workers can still be seen cooking beef on makeshift grills, and the smell of barbecue permeates their construction sites.
When it comes to Argentina's economy, the status of beef cannot be ignored. It's fair to say that beef has been at the heart of the Argentine way of life for more than a century. and poems praising the art of herding in the Argentine savannah, which is also a test of Argentine national pride.
This article will examine the rise and fall of Argentina, the "kingdom of beef", and why Argentina banned beef exports, and the impact this has on our country.
In the history of Argentina, the introduction of cattle and sheep by European immigrants led to the development of animal husbandry in Argentina, and also led to the dietary habits of Argentines who exclusively respect beef. Argentina has more than 4,000 kilometres of coastline, but it's rare to see seafood on the Argentine table, except for the codless steak and the occasional fried wreath.
It can be said that the Argentine love for beef is also one of the cultural influences brought about by European immigration.
Driven by the boom in beef, the Argentine economy set a world record of more than 6% economic growth for 43 consecutive years before the outbreak of the European war in 1914, which no one has ever beaten.
The Argentine's love of beef is reflected in the diet, the national dish "asado a la parrilla" (or simply "asado") is a charcoal-grilled beef that is slow-roasted directly on the grill and seasoned with only salt and pepper after cooking; In the countryside, people will even spread out the belly of the calf, and directly use the iron frame to spread the limbs and roast it next to the firewood.
Served with Argentine herb sauce, this is a dream delicacy in the hearts of Argentines.
Argentines firmly believe that no matter how society changes and how technology advances, Argentine beef of high quality will always have a stable market demand. So, they argue, if the country's economy can be driven by sustained demand for beef in Europe and globally, why bother to promote education, develop other technologies, and even improve infrastructure to develop other industries?
Argentina was one of the richest countries in the world at the beginning of the 20th century, but its educational penetration rate was surprisingly low. In 1895, the literacy rate in the American metropolis of Chicago, dominated by agricultural exports, was 95 percent, but the illiteracy rate in Buenos Aires, the capital of Argentina, was over 75 percent.
While this may have something to do with the fact that Buenos Aires, as a seaport and capital, attracts many lower-middle-class immigrants from both foreign and rural areas, it still shows the neglect of education in the local society.
In the past, livestock and farming did not rely on higher education and technology. However, what Argentina** did not realize in the past was that what really opened up a larger market for Argentine beef was the most advanced railway and freezing technology at the time.
After the world war, Europe was no longer the leader of the world economy, and the British beef market no longer had global influence, and could only rely on topics such as **, finance, and royalty to maintain its existence.
The United States, now the world's hegemon and largest market, is one of the world's largest producers of beef, and America's demand for Argentine beef is limited to satisfying a small number of discerning gourmets.
Livestock farmers in Argentina face the challenge of internal and external difficulties and are unable to respond effectively to these changes. They have failed to promote Argentine beef brands in Asia and other emerging markets, nor have they further processed their beef or developed other value-added strategies.
Although Argentina's main exports are still beef and cereals, wheat has been replaced by soybeans in the past, and China has become one of the largest markets for soybeans and beef in Argentina.
More than 200 years later, Argentine livestock farmers are still standing still, unable to achieve a breakthrough.
Thousands of cattle run every day in the pastures of Argentina. According to statistics, about 13 million cattle are slaughtered in Argentina every year.
Argentina produces 2.8 million tonnes of beef, which translates to $5 billion in purchasing power parity and is a key pillar of the country's agriculture and the economy as a whole.
However, in 2020, Argentina not only faced the challenges of the pandemic, but also domestic prices**. With prices soaring over the past 10 years, all of which have been in the double digits, inflation is projected to be 42% in 2020, down from 53 in 20199%。
Argentina is the world's fifth-largest exporter of beef and a major consumer of beef. However, the cost of living for the Argentine population has risen by 46 in the last 12 months due to persistent domestic prices3%, of which beef ** in April increased by more than 65% year-on-year.
In order to curb consumption growth of less than 30% in 2021, Argentina** decided to adopt a temporary export ban on food**. However, the move could result in a loss of up to $250 million in Argentine exports, especially in beef exports.
Argentina is the world's fifth-largest beef exporter, and China, as the world's largest beef consumer, has naturally become a major export market for Argentine beef. Therefore, in a radio program last year, Argentina's Fernández criticized the beef export policy of the former Macri, and believed that China's procurement demand was the main reason for domestic beef.
Fernandez stressed that the demand for meat products in China is gradually increasing. Argentina is now aware that meat products are out of control and must take immediate steps to adjust them, and calls on companies to participate in the reform of the domestic market.
Fernández pointed out that although the meat export industry was fully liberalized during Macri's administration, the number of livestock such as bulls did not increase, resulting in an increase in meat products**, which only benefited large markets such as China, but did not bring tangible benefits to Argentina's domestic market.
Fernández said that if the suspension of beef exports for 30 days cannot curb domestic ***, measures such as withholding income tax and setting export quotas may be adopted.
Argentine beef accounts for 29% of total production and 10%-14% of total production value, so the industry believes that the export ban will have limited impact on the market. In fact, this is not the first time that Argentina has suspended beef exports, as it was announced in 2006 to increase domestic exports and reduce consumers.
In order to increase beef consumption, they have taken a series of measures, including restricting beef exports and **controlling. These initiatives aim to reverse the sluggish trend of beef consumption.
However, ranchers report that these policies have led to a decline in profits. As losses mounted, more and more slaughterhouses were forced to shut down, which led to thousands of Argentines losing their jobs.
Although beef has risen with inflation, herders believe that control has done serious damage because it makes it prohibitively expensive to maintain large herds.
They point out that seeing China's growing demand for cereals over the past decade, growing soybeans is more profitable than raising cattle. As a result, many cattle ranchers choose to switch to soybeans, which are mainly exported to China for animal feed.
Ernesto Ambrosetti, chief economist at Argentina's largest agricultural organization, the Argentine Agricultural Association, said they were witnessing a historic decline in their country's beef industry, while neighboring Paraguay and Uruguay had already surpassed them in export rankings.
According to the report, Argentina is anxious to find foreign exchange, while agricultural exports are an important foreign exchange earner. However, the public is not optimistic about this. The perception in the industry is that consideration should be given to how to increase production capacity and output, as imposing an export ban could lead to a wrong direction.
The measure has already caused discontent among those in the meat industry. "China is an important part of our beef export market, accounting for 2 to 30 percent, and all of them pay part of the deposit upfront, and a ban on exports will seriously damage our export credit," said Ciariti, president of the Argentine Meat Business Association. ”
Prior to this, Argentina** limited beef exports to 50% of normal exports in order to control fast** prices, leading farmers ** and threatening to stop the local cattle and grain trade.
Argentina's four major meat business associations have reached a consensus to strike for eight consecutive days.
Shortly after export controls were imposed, Argentina** announced that it would resume the free export of beef to China. Agriculture Minister Dominguez said the decision was made after a meeting with the heads of the four main agricultural associations and was implemented from September 27.
Previously, restrictions were imposed, sparking tensions in the agricultural sector. The new policy will remove these restrictions and allow cattle farmers to freely export beef to China.