Despite the enormous potential of the three main meats in Argentina, the lack of support from economic policies in recent years and financing has led to a stagnation in the sector and missed opportunities for growth. This was agreed upon by Jose Lizzi from the Livestock Commission of CREA, Daniel Fenoglio, president of the Pork Federation, and Joaquin de Grazia, representative of Granja Tres Arroyos, during the livestock day «The field is much more than a field,» organized by the Meat Commission and the counselors of the Argentine Rural Society (SRA) at the Rural Exhibition of Palermo. At this event, one of the busiest on Tuesday, the specialists emphasized the need for a strategic vision, intra-sector agreements, and strong financial and state support to harness the country’s enormous potential and achieve its maximum development.
«There is capacity to do much more in the sector, but for that, we must set ourselves truly interesting challenges, focusing on overall efficiency and sector billing, which will ultimately allow greater development throughout the chain,» Lizzi said. This is happening in a context where beef cattle farming has been «stagnant» at 14,000 to 16,000 million dollars in revenue since 2011, with an efficiency of 54 to 56 kilos of beef with bone per head. In comparison, countries like Australia are seeking to double sector revenue and have achieved almost 90 kilos of beef with bone per head.
«There is much to do in terms of market, investment, and foreign exchange generation. We can increase jobs in the chain from 470,000 to 600,000,» he added. To achieve these goals, Lizzi believes it is necessary to come to an agreement within the chain and define common development goals, setting aside short-term vision and setting strategic objectives. He also highlighted the need for greater support from the state.
«For a long time, we had price regulations and export closures, and the discussion focused on sector and country development versus domestic meat consumption. This dichotomy should not exist because if the sector is not developed, the domestic market will consume less meat. Currently, we have gone from 50 to 45 kilos of meat per capita because the sector has decreased compared to population growth. Without sustainable long-term development, this trend will intensify, and with the policies we have had, that development will not come,» he said.
The representative of beef also emphasized the need to establish incentives and motivations to improve weaning efficiency, increase weight gain, optimize the entire chain, and sell more and better. «We need to have two or three long-term objectives and some assured policies,» he said. In this way, he concluded, by improving all efficiencies, Argentina could produce and export almost 50% more in five to six years, reaching 1.5 million tons in exports, representing between 8000 and 10,000 million dollars in foreign exchange.
«The producer needs to see this progress more to believe and understand where he should go. Decisions are long-term. Modifying a livestock production system takes a long time. Therefore, it is absolutely necessary to have a strategic view that includes state policies and internal agreements within the chain to know where to go,» he concluded.
A similar situation is experienced in the poultry sector, where De Grazia pointed out that chicken meat «still has much more potential to express itself in Argentina, especially in the province of Entre Rios, which produces 50% of the country’s chickens. In this region, there is still a lack of technology to implement precision poultry farming that could reduce food conversion by 100 grams and increase weight by 200 grams.»
To achieve this, it is essential to have financial support. «We need support from banks to expand precision breeding in two million square meters, which implies installing 1000 sheds of 2000 square meters each, with a cost of US$300,000 per shed. In countries like Brazil and the United States, this type of growth is financed with loans,» he said.
De Grazia also noted that there is not much room to increase the amount of chicken destined for the domestic market, as the 45-50 kilos of poultry consumed per person are almost the limit. However, he stated that production could be increased for export. Currently, the total export market for poultry products is 15 million tons, and Argentina only contributes 200,000 tons. «With a cumulative annual growth of 4%, in five years, we could increase our production by 30%, reaching 600,000 tons, representing 1200 million dollars in exports,» he said.
The pork sector is also experiencing a moment of tremendous opportunity, according to Fenoglio, who indicated that global pork production is declining, opening up space for growth in Argentina. To seize this opportunity, it is essential to improve macroeconomic conditions.
«What we need is for the country’s macro to work well, to have a single exchange rate. Behind the gates, pork producers do things well, we have production indices similar to the rest of the world, we are very competitive, and if the macro is adjusted, we do not need anything special,» he said.
However, Fenoglio clarified that the sector needs an adjustment in VAT. «In 2017, they lowered it to 10.5%, but costs are practically at 21%, so the average is from 19 to 20%,» he explained and added, «VAT is a neutral tax, which is the same for purchase and sale, but in the case of pork, it is not, and that is the biggest obstacle the sector has today to continue investing and be profitable.» Another measure required by the sector is the elimination of withholdings, which are currently at 5%.
Pork consumption in Argentina is around 18 kilos per person/year, marking significant growth considering that it was three kilos until 15 years ago. «This is the sector that has grown the most, and we have a growth plan to reach about 25 kg per year if the macroeconomy is adjusted,» the leader concluded.
