Dei'ah veDibur - Information & Insight

A Window into the Chareidi World

15 Adar 5766 - March 15, 2006 | Mordecai Plaut, director Published Weekly










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Argentina Suspends Meat Exports — 30 Percent of Israel's Supply Affected

by M Plaut and Yated Ne'eman Staff

Faced with rising domestic prices for beef, Argentina suspended all exports for six months according to a report in the Israeli business daily Globes and other media. Argentinean beef makes up about 30 percent of Israel's total beef consumption, and some 50 percent of its imports.

Argentineans themselves have one of the highest rates of beef consumption at about 65 kilos (143 pounds) of beef per person per year. Some people there are said to eat it for breakfast, lunch and supper. Since the current government has made inflation one of its key issues, the rise in the price of beef has been a center of attention.

Last year the overall price rise in Argentina was 12.3 percent, but beef rose 21 percent. This year beef prices already rose more than 25 percent at the wholesale level. Although most of this increase has not yet filtered down to the retail price, the government was worried enough about the prospect to ban the export of beef entirely, hoping that the increased supply would moderate the price.

Last year Argentina exported about 600,000 tons of beef, worth $1.4 billion. Argentinean meat exporters were not happy with the ban, and some said that in the long term this may cause the price to rise since it will discourage investment in new production. Argentina is the third largest world meat exporter, and farmers feared that they would lose important customers. Argentineans consumed about 2.4 million tons — about 80 percent of their total production.

Israel's share of Argentinean production is only about 30,000 tons, but it is about 30 percent of the total Israeli consumption. Much of the mehadrin meat now comes from South America, but there were no available figures on how much comes from Argentina and how much from other countries in the area.

Israel imported 58,000 tons of beef in 2004, almost all of it frozen. Half of Israel's frozen beef imports come from Argentina, where there is a longstanding organized network of kosher meat packing plants for Israeli wholesalers. Israeli importers have an inventory of frozen beef of less than six months. Most of the rest of the imported beef comes from Brazil and Uruguay.

In the past, Shearis Yisroel has shechted meat in both Argentina and Uruguay, both of which have healthy cattle that is untainted by problems of zebu animals. In 2001 and 2003 there were significant breaks in Argentinean production and exports due to outbreaks of hoof-and-mouth disease.

Domestic Israeli producers sold 34,000 tons of beef in 2004, most of it to restaurants and hotels. Imports accounted for 63 percent of Israeli beef consumption.

Last week Argentinean President Nestor Kirchner declared, "Beef should be provided to Argentineans first, at a price they can afford." He accused the beef industry of raising prices to sabotage anti-inflation plans. "We aren't interested in exports at the cost of starvation among the Argentine people," he added.

Israeli Minister of Agriculture Zeev Boim has instructed the ministry to examine alternative sources of beef imports, in order to prevent a shortage and higher meat prices in Israel.

It is likely that Uruguay and Brazil can easily make up the needs of Israel, however what effect the loss of Argentinean production will have on the world market and on general prices is less clear. It seems likely that there will be no shortages in Israel, but at what price remains to be seen.


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