Argentine beef exports are once again gaining importance in international trade

Argentine beef exports are once again gaining increasing importance in international trade. Amid demanding markets, relatively stable prices, and new trade opportunities, the meat processing sector faces a challenging outlook.

The meat export industry is undergoing a period of restructuring. Unlike in the past, the challenge is no longer sales, but rather producing enough product to simultaneously supply multiple markets. “Our problem is a shortage of local raw materials, and I don’t see any immediate prospects for recovery,” warned Mario Ravettino, President of the ABC Consortium.

This structural constraint forces a rethinking of priorities. In the short term, growth will come not from increasing herd size, but from improving efficiency and productivity. “The most important thing is to try to gain weight before increasing head size,” Ravettino explained, referring to the need to increase the weight of each animal as a defensive strategy. The economic context, according to the director, presents an unusual opportunity: “Today, producers have achieved the profitability they’ve long demanded, so this will be an opportunity for investment.”

China: guaranteed volume, prices set elsewhere

China remains the primary export destination for Argentine beef and the market absorbing the largest volume of production. But it also sets the rules of the game. “They are the world’s leading importers, so they undoubtedly determine the price,” Ravettino stated, emphasizing the asymmetric nature of the negotiations.

In this context, current indicators demonstrate a certain stability in each product segment, determined by competition between exporting countries. Therefore, improving profitability depends less on price than on optimizing the export structure. This is where a critical issue arises: the approval of the waste protocol. “This would give us a significant boost due to the portion of profits that currently remains in Hong Kong, as goods are supplied through informal channels,” he explained. The technical agreement with China Customs (GAC) is nearly finalized, and its implementation now depends on a political decision.

United States: Preferential Access and Volume Reallocation

The American market is strengthening its position as one of the most important strategic opportunities for Argentine beef. The new agreement will allow for the export of 100,000 tons, of which 80,000 tons will be duty-free and 20,000 tons will be subject to a 10% duty. “This is the only zero-tariff market we have,” Ravettino emphasized, noting the competitive advantage the United States has over other destinations.

The quota covers a wide range of products: high-quality cuts of meat, muscle meat, hamburger trimmings, and other industrial goods. Regarding volumes, the director ruled out any risk of quota non-compliance. “If we export 700,000 tons by the end of this year, then those 80,000 tons will be covered,” he assured.

However, preferential access will have side effects. Since there will be no immediate increase in production, some of this volume will have to be reallocated from other markets.

“There is no doubt that there is a production shortfall. Since this is the only market with zero tariffs, it will be filled from other sources,” he acknowledged, noting that China is the main candidate for losing its share.

Chinese safeguards: the risk of a new trade ceiling

Adding to the challenges facing exports is the safeguards investigation initiated by China, which could change market access conditions. Ravettino suggested that the most likely scenario is the introduction of a quota system for each country based on export history. “Within the quota, the current 12% tariff will remain in effect, but outside the quota, it could rise to 20 or 25%,” he explained.

If this system is confirmed, the challenge will be maintaining competitiveness within the allocated quota and preventing profit losses in the key market due to tariff increases above the quota.

Tax Retention: A Distortion Limiting Competitiveness

In the domestic market, meat export duties remain one of the main factors affecting the industry’s competitiveness. Ravettino stated categorically: “We agree with the government that this is a distorting tax and that it will be eliminated.”

While acknowledging that strong domestic demand and stable prices are delaying immediate decisions, he confirmed that a technical consensus has been reached. “This is an ongoing issue for us, and we believe it should be resolved next year,” he stated, making clear that the tax burden ultimately hinders investment and production.

Beyond the core traditional destinations, international demand is becoming increasingly segmented. In this scenario, halal business presents itself as a universal opportunity. “When you think of halal, you think of Arab countries, but today there are more Muslims in Europe and the United States than in Arab countries,” Ravettino explained.

The key, he noted, is understanding the end consumer, not the destination country. However, a structural constraint resurfaced: a lack of resources prevents the full benefits of diversification. “We operate in all markets, but we don’t have the raw materials,” he concluded.

Europe and Traceability: Compliance Without Additional Costs

In conclusion, Ravettino clarified the scope of European environmental and traceability requirements. He then explained the role of the Visec Carnes system. “It is not a certification body. It performs a due diligence function, providing the manufacturer with the documentation required by the European Union free of charge,” he explained.

Unlike private certification schemes, the Visec system allows for compliance with European standards without additional costs, since “the European Union does not require certification, but rather documentation.”

Tags: Beef cattle, Argentina