This Tuesday, INDEC will release inflation for February, which according to reports you will save 6%. In this primacy, the increase in meat has played a central role which, according to a survey by the Argentine Center for Political Economy (CEPA), increased by 29% last month.
The 29% increase in beef is the largest for a month since 2020. The report specifies that the prices of different cuts of beef in a year increased their price by 76.8%, below the general price increase in the economy, which stands at 101.3%.
Private measurements indicate this inflation in February was between 5.7% and 6.4%. Thus, year-on-year inflation will exceed 100% for the first time since 1991.
Food led price hikes in February. Other items that bolstered the index were Recreation, Private Medicine, Cellular and Cable Services, and Housing Spending, due to rate updates.
The role of meat in the February index data is central. From CEPA they specify that meat consumption represents, in the conformation of the consumer price index (CPI) between 7% (GBA) and 13.3% (Northeast) of the total.
According to CEPA, in February the “intermediate cuts” were the ones that raised their prices the most: 30.5%. The “expensive” and “cheap” cuts instead recorded an increase of 29.2% and 27.7% respectively.
The main increases of the last month occurred in: large steak (34.2%) square (32.9%) and palette (32.1%).
The report also highlights the variation in price increases, depending on the marketing channel. The average price of meat in butcher shops it recorded an increase of 33.5% compared to January 2023, exceeding by more than 15 percentage points the increases in supermarkets, which were 18%.
The rebound in beef in February came after several months in which the gauge lagged overall inflation. In the last months of last year and due to the drought, the meat was stretched and helped to slow down the inflation that occurred between October and December.
From June to December 2022, Over-the-counter beef rose 8% according to data from the Institute for the Promotion of Argentine Beef (IPCVA), while inflation for the period was 50%, details CEPA. “This was the result of the impact of the drought, which severely affected the production of forage and pasture needed to feed the livestock, generating an advance in livestock sales by producers and a greater supply available on the market, keeping the price”.
However, in the CEPA they point out that if you look at broader indicators, meat beats the CPI. From October 2020 to today, the data indicates that meat increased by 325% and the CPI rose by 249%.
To explain last month’s increase, the study refers to the increase in the price of corn, which affects livestock feed, the increase in exports in February – they increased by 9.4% compared to the same month of 2021-, together with possible under-billing to speculate on the FX gap.
The survey also cites the level of concentration in refrigerators as one reason for the increase. “The ten largest refrigeration companies and groups in Argentina worked in the year 2022 in total 3.84 million head, about 280,000 more items than in 2021, with a level of participation equal to 28% of the national total”, he points out.
The latest recordings prove it February inflation could be surpassed by March inflation, which consolidates more than 6% from increases in food, tariffs for public services, private schools and transport. The first quarter will thus close with an increase close to 20%, while the year promises to go beyond 100%.
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.