The effect of the rise in farm prices is already being transferred to the consumer. EFE/EPA/VICKIE FLORES
The year got off to a busy start for the chain and the beef market. Since 2023 began, the price of the farm had a strong jump of between 35% to 40% in the Cañuelas Agricultural Market (MAG) trying to correct part of the marked delay that there was in the values during 2022, which were located almost 50 percentage points below 95% inflation during the previous 12 months.
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After the tragic cases in the province of Buenos Aires, from the entity that groups the large refrigerators, the request was emphasized to advance with the commercialization of meat in pieces and to put aside the sale and provision of half cattle
In this way, at the end of January the average price of an animal for consumption, such as the steer, went from being worth $320 per kilo to $460, which will inevitably be transferred to the consumer in the butcher shops. As indicated to Infobae by the president of the Argentine Chamber of Slaughterers and Suppliers (CAMYA), Leonardo Rafael, at the counters the rise in the price of meat was from 15% to 20% during January.
“The values still need to be updated, but since the rise was sudden, we are waiting a bit so that sales do not fall and we endure the rise with profitability. The kilo of meat in the half beef has to be worth $1,200 and today I do not understand that it has cost more than $1,000 a kilo to the butcher shops. Butcher shops are missing a bit of the increase from the supplier, while in butcher shops the consumer will also be missing 15%,” said Rafael, who, according to his own calculations, would mean an increase of between $200 and $400 per kilo depending on the cut.
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This was reflected in a statement from the Ministry of Agriculture, which also mentioned the update of the refrigerated boneless beef export agreement, extending the recognition of the refrigerated product’s useful life to 120 days.
However, to know how quickly the increases will be transferred to the consumer, it will be key to know if the farm will continue with its upward trend. “We are waiting for the market’s reaction to see if it continues to rise or with these values a ceiling has been reached. If the rise is still firm, there will be a readjustment of prices in February. If they remain stagnant, what is lacking in the butcher shops will rise, but if it continues to rise, the transfer of prices will be faster, ”said the head of CAMYA.
For the president of CICCRA, meat has already risen 10% to the consumer
For his part, the president of the Meat Industry and Commerce Chamber (CICCRA). Miguel Schiariti, the butcher shops have already adjusted their prices by 10% and will continue with the transfer of the increases until completing the increase of between 35% and 40%, although he maintained that “it will be done gradually and slowly, because no butcher You want to tell a client that the kilo of milanesas that you sold for $1,300 pesos yesterday, costs $1,700 today.”
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“The same thing that happens between the refrigerator or butcher with the butcher when the half beef comes down. An average has been made between the meat that I had on camera to absorb a little the loss of the first moment and not make a sudden transfer. Nobody wants to lose a butcher as a customer,” said Schiariti.
For the head of CICCRA, “in the next three and four weeks the increases will be fully transferred”, although, as Rafael indicated, “we have to see what happens, because the rise in the market was last week and we have to see If these prices are validated, they go up or down this week. It gives the feeling that these prices are here to stay, but the one who defines this situation is the consumer”.
As previously stated, the delay in the price of farms and meat during 2022 was forceful and both in the livestock sector and in the industry, it was known that the “correction” of them was going to arrive. For this reason, the secretary of the Argentine Rural Society (SRA), Carlos Odriozola stressed that “we had already announced that the delay that was taking place at some point was going to have to be removed. You have to think that last year meat increased 42%, while inflation was 95%. Faced with this inevitable recovery in the consumer farm, there will be an increase in the gondola and that will be an increase of between $300 and $400 per kilo”.
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For Odriozola, it is “possible” that prices continue to rise in the coming days, not only because of their “inevitable” correction, but also because of a recovery in international prices, which were falling until a few months ago. due to a drop in Chinese demand.
“Values are starting to pick up in Europe, with USD 14,000 per ton in the Hilton Quota. That is why the rise is going to be accompanied by the exterior, allowing exporters to pay a little more than what they were paying. This makes a combo that pushes prices up and when the rains start the producers are going to look favorably on retaining a little more farm, limiting the supply”, concluded Odriozola.
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