The eternal question for consumers is how to beat inflation. Households with some savings tend to stock up on a product they consume a lot or like, waiting for the current price to “freeze” and last until the end of the year. In early 2022, the person who stocked the freezer with noodles got a good deal. Those who saved up mincemeat to eat until December, on the other hand, were out of luck.
Recent annual data from the consumer price index (CPI) show that the noodles are up 144% year on year, exceeding the average inflation for the year, which was 94.8%. Howeverground beef increased by 40% in the same period. Households that skimped on pasta kept their money better than those that relied on beef products. Pasta has become nearly 50% more expensive than average inflation. The opposite happened with meat, it grew by almost 50% less than the CPI average.
According to INDEC, half a kilo of dry stew-like noodles sold for $78.44 in December 2021. The same product reached $191.91 in December 2022. The year-over-year increase is 144%. Instead, there was a pound of ordinary minced meat $507.32 in December 2021 and moved to $698.77 in December 2022.
The meat was a counterweight against the general rise in food prices, as reported by clarion. While fruit and vegetables recorded increases of between 120% and 170%, meat and derivatives of 62%.
The price trend is impossible to predict. In 2021, the opposite happened compared to 2022: ground beef increased by twice as much as noodles. For all of 2021 the half kilo pack of stews – the reference for INDEC – had risen by 33%; from $60 to $78. In this sense, it was lower than the general inflation of that year (50.9%). The kilo of ground finished December 2020 at $300, but at the end of 2021 it was already at $508, i.e. an increase of 70%, above the average.
An exogenous factor, such as the Russian invasion of Ukraine, and an endogenous one –The drought– seem to have contributed to this situation.
Agricultural commodities, which already came from a high price in 2021, continued to rebound in 2022. This is evident in grains. The agricultural complex contributed more than $40,000 million in exports in 2022. It is 22% more than in 2021. Among the leading products are soy flour (14.2% of exports), corn (11%) and soy flour (6.9%).
The key input into pasta is flour, which has soared throughout 2022. This is also seen in the price of a kilo of French bread. In December 2021, it was at $208. By the end of 2022, it had dropped to $428, which is up 105%.
While government and industry have devised compensation funds so that international prices don’t impact the local table so much, the mechanism has limits in its ability to moderate the amounts. In addition, the Executive Branch needs exports to collect the fees for such an operation and accumulate dollars in the Central Bank. The agricultural complex It contributes 48% of the country’s total exports.
The price of beef, on the other hand, increased by less than 60%. The other alternative meats have risen the most. Chicken passed 96%.
The main factor of stagnation in the values of beef is linked to the production context, which is suffering the effects of a negative combo composed mainly of one of the worst droughts in recent times and a battered economy with little purchasing power on the street. This means that there is more supply than demand in the fat farm market.
In any case, with prices that have risen well below inflation, consumption has not recovered and has increased by only 400 grams per inhabitant, reaching 47.2 kilos per capita, according to data from the Chamber of Industry and the Meat Trade (Ciccra).
The farm has had seven consecutive months of falling prices, adjusted for inflation. “Over the past 30 years, such a persistent adjustment has only been observed 3 times (2008, 2012 and 2013). And only the 2008 event was extended by 8 months”, detailed the economist Juan Manuel Garzónof the Mediterranean Foundation.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.