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.
