A study by the Mediterranean Foundation has revealed that despite being the world’s leading exporter, meat in Brazil is cheaper than in Argentina in April, while Uruguay and Chile are the most expensive in the region.
In the case of Argentina, consumer prices in April they were 80% above of the same month of the previous year in relation to 18 cuts according to data from the Institute for the Promotion of Argentine Beef (IPCVA), “a nominal change that looks very tall but that in terms of local inflation (109% for the same period). “It implies a real adjustment of 15%, i.e. a significant reduction in the price of the product,” the report notes.
Depending on the job, there are external and internal factors that influence this impairment. As for the external context, the decline in international beef prices compared to the previous year, the average price of the ton exported this year is 27% lower than the price observed in the first four months of 2022.
And as far as local factors are concerned, on the supply side, the drought and lack of sufficient feed for the animals, has forced many plants to speed up and increase waste and shipments to the slaughterhouse. And, on the demand side, there’s a complex macroeconomic scenario for consumption, which combines a drop in the purchasing power of the income of various social groups (employees, pensioners, self-employed workers with low productivity, etc.) and a very low level of confidence in the economic future.
“In this scenario, which combines a greater supply of meat with lower international prices and contained domestic demand, it seems unlikely that meat prices will recover, in real terms, in the coming months. Good news for the consumer, less good for the farm and the meat producer,” they noted.
Comparison
In the comparison between Uruguay and Argentina, based on the prices of public bodies and mixed institutions, 12 cuts of beef at the final consumer level and values for the month of April, it is noted that the average price of this basket was 9.4 USD per kilo in Uruguay and 8.3 USD per kilo in Argentina (in both cases at the official exchange rate), or, on average, meat in Argentina was 12% cheaper than in Uruguay.
This gap was smaller than that observed in the final months of 2022, when it was close to 30% (in Argentina’s favor), but it should also be noted that, at other times in the not-so-distant past, meat in Argentina was more expensive than in Uruguay (by chance, +18% in 2015 and +8% in 2016).
In the comparison between Chile and Argentina, based on 13 cuts of beef, the average price of this basket was $12.4 per kilo in the neighboring country, while in Argentina it was $9.8 per kilo. For the baseline month, beef was 21% cheaper in Argentina than in Chile. Here it is also observed that the gap was smaller than that observed at the beginning of this year, when it reached 39%, again in favor of Argentina.
Finally, in relation to the comparison between Argentina and Brazil, they resorted to the online prices of supermarkets as in the neighboring country they were able to access a price base for cuts of meat from official sources and/or supply chain institutes as in the other countries.
The comparison with Brazil is limited to the values of supermarket online stores. In this case, due to the size and regional diversity of Brazil, prices in multiple supermarkets and/or online stores were surveyed, the cases of Carrefour, Pao de Azucar, SuperMago, Mambo, Club Extra, SuperPrix and Boa Supermarket for a series of 8 cuts of meat, taking the average values obtained.
The average price of these 8 cuts is 2.545 $/kg in Brazil, lower than the average value of 2.687 $/kg in Argentina in the third week of May
Survey of online shops
IERAL also conducted a survey of online supermarket shops in the third week of May, with the aim of including Brazil in the comparison of beef prices in the region. In this measurement, which reached 16 supermarkets and more than 150 beef cuts prices, the price of a basket of 8 medium/high quality cuts was 2,687 dollars per kilo in Argentina, 2,545 dollars per kilo in Brazil, $3,174 in Uruguay and $3,555 in Chile.
“These prices in online supermarket shops reveal that the country continues to have, as in previous measurements, cheaper beef than Uruguay and Chile and that it is 5%-6% above Brazil prices,” summarized the Work.
It should be remembered that Brazil is the leading exporter and is probably the most competitive (lower cost) in terms of prices for cattle and beef worldwide. “Although these are consumer prices, it should be noted that the gap in value with Brazil is so small, that any importation of cuts from that origin, considering the logistics costs for placing that commodity in the country, would well little effect, if any, on the domestic prices of the product”, concludes the report.
Source: Clarin
