“Beef for Argentina is like cigars to Cuba. It would be inane to make cigarettes in Cuba.” (Photo by Enrique Marcarian/Reuters.)

Argentina's Slaughterhouse Blues

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In the name of domestic politics, President Kirchner is alienating investors and squandering her country's reputation for premium beef.

By Charles Newbery — Special to GlobalPost

Published: October 23, 2009 09:35 ET
Updated: October 25, 2009 11:13 ET

BUENOS AIRES, Argentina – Eduardo Freije is proud of his beef.

The 52-year-old rancher likes ribs and filet mignon barbequed over a wood-charcoal fire and served up with gizzard, kidney or tongue. A beef stew is a favorite too, as is a grilled steak with fries.

This is Argentina, where a tradition of letting cattle roam on vast, fertile grasslands has produced tasty, tender beef that’s healthy and affordable.

Argentines eat 74 kilos (163 pounds) a year, the most in the world, and more than twice the 30 kilos in the U.S. Why wouldn’t they? Argentina has 57.7 million cattle and 40 million people. Their grass-fed beef has half the cholesterol and fat as U.S. beef raised on cheap corn in cramped, muddy feedlots that demand expensive outlays for diesel, fertilizers and pesticides.

By contrast, grass-fed beef like Argentina’s contains a healthier sort of fat, like olive oil, and good-for-you omega-3 fatty acids. The environmental impact is low because cattle are left to roam at will. And the costs are favorable: $1.50 a kilo for a whole steer, compared with $2.75 in the U.S., according to the latest data compiled by Montevido-based Blasina & Tardaguila Consultants.

“We cannot eat all of the beef we are capable of producing,” says Freije, who manages 1,300 cattle at a ranch his family started in the 1870s, a four-hour drive southeast of Buenos Aires. “To grow, we need to export more.”

He thinks exports could surge to 50 percent of the annual production. Currently, the figure stands at 17 percent.

But that’s not happening. Since 2005, Argentina has slipped from third to seventh in global beef exports as high taxes, price controls, sales restrictions and a drought have hindered global sales. A surge in slaughter rates and domestic consumption is in fact shrinking the herd. Shortages are looming that may reduce exports further and jack up steak prices at parrillas, the country’s ubiquitous open-grill eateries.

Not just beef woes

Hard times for such an emblematic industry in Argentina are a sign of how erratic and misguided policies are driving away investors and costing the country growth opportunities....

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