Why is it so difficult for Argentina to sell premium meat to China?

Last week at the Sial fair in Shanghai the news circulated that the Chinese were paying good prices for meat from animals finished in free-range (“grain fed”), and that ignited the enthusiasm of meat exporters, who dream of selling to the Asian giant something more than just cows. To better understand the challenges that arise for Argentine meat in that market, Clarín Rural spoke with Juan Budano, president of Compañía Central Pampeana, a company that slaughters 12,000 heads per month in its own and third-party plants and that since 2013 has been one of the five main exporters of beef to China, where it currently sends 3,000 tons per month .

Budano returned two days ago from Shanghai, where he participated in the Sial, and when consulted about the grain fed meat market, he began by clarifying that finished animal parts have been exported to the corral for a long time, particularly cuts from the front quarter, and that they have never been exported. paid with a price differential. “What there is,” he says, “is a very small market of 2,500 tons per year for premium meat. There are about 220 tons per month, which is equivalent to 8 containers. “Demand may be increasing a little, but it is still a very small market.”

To have an idea, the company Budano sends 130 containers per month to China, of which only 1 or 2 are high quality meat. “We always want to do more but we come up against the price,” he explains, and affirms that Argentina still has a lot of work to do in the promotion and positioning of its meat in that market.

“There Australia and the United States are synonymous with quality, the meat of Mercosur for them is meat of volume. There are no restaurants in China that say they sell Argentine meat, high-end restaurants advertise that they sell Australian meat. It is a challenge to start sending more quality meat to China and all of Asia, but we have to accelerate a lot and invest heavily in promotion“, says.

Then add another key factor linked to the equation of local producers and slaughterers. “We have to invest in have animals with more days of confinement. The Chinese ask for between 150 and up to 180 days of free range, due to the issue of marbling, which Australian meat usually has, and here We do not reach 90 days because they do not give us the costs. Additionally, Australia has the advantage of a free trade agreement with China while we pay a 12 percent tariff, which is a lot of money.”

Expanding the scope of the analysis, Budano affirms that at this moment the slaughterers equation is not attractive because the price of the property is too high and the demand is low in almost all markets. The prices offered by China are far from being those of two years ago, Israel is just returning to imports after the impact of the escalation of the conflict in Gaza and the local market is punctured by the economic crisis, with annual per capita consumption that It fell to around 44 kilos per person. And for Cuota Hilton, he says, “he doesn’t give the number.”

In short, he explains, the farm took a jump in price in November and the producer sat down to wait for a devaluation that never came. At the same time it started to rain, the grass grew and the animals went to the fields to add kilos at a low cost. Today the slaughterer does not have the numbers to pay what the producer and breeder asks for. “They ask for 3,500 pesos per kilo and we would need it to go down to 3,200 to have some margin”, he details.

So, the exporters’ strategy is simple: they reduce the volume of work and cool down their businesses until that farm that is in the field appears. “National slaughter fell 15 percent from last year to this year due to lack of prices. Only now the most industrial cow is beginning to appear, because the frosts are coming and that cow has to leave the field. And with the pressure of the kosher business, which returned last week, they are going to start slaughtering a little more steer,” says Budano. And then he adds that To see a greater volume of work we will have to wait until August or September, when the greens begin to run out and the pastures have not yet re-sprouted. “More Hilton steers will most likely start coming out at that time,” she says.