The move comes months before key mid-term elections, with centre-left President Alberto Fernandez keen to avoid a sharp rise in the cost of beef in a country where families regularly gather to cook meat around the “asado” grill.

Spiraling consumer prices could hurt his party’s chances with voters in the South American country already feeling the impact of the coronavirus pandemic.

The government had in June limited exports of some beef cuts until the end of the year, sparking tensions with farmers. A cap until the end of August on beef shipments at 50 per cent of the previous year’s level has now been extended by two months.

“In the short term, the tool of limiting sales abroad is essential to guarantee Argentine access to beef in the face of the sharp increase in prices for consumers,” it said in a decree in the official gazette.

Argentina is the world’s fifth-largest beef exporter and a key supplier to China. It is the top global exporter of processed soy and a major wheat and corn producer.

Jorge Chemes, president of the Argentine Rural Confederations, said that farm bodies would meet before deciding what action to take. He threatened rallies and trade halts.

“I’m certain we will have something along the lines of a trading halt,” he told a press briefing.

Lost millions

The president of Sociedad Rural Argentina (SRA), Nicolas Pino, said members would meet on Wednesday and Thursday and could then announce a commercial strike.

Earlier this year, protests by farmers led to the national livestock markets closing.

Argentina has suffered from high inflation for years, with the annual rate running above 50 per cent, and has started to emerge this year from a recession since 2018.

Miguel Schiariti, head of Argentina’s CICCRA meat industry chamber, told Reuters the sector had lost around US$100 million in exports last month due to the caps, which could push up prices.

Another industry source said that they handed momentum to other producers.

“The government does not understand the damages of extending the cap, since the industry has lost millions of dollars with the restrictions so far and it is a way to continue giving markets to other countries,” he said.

— Reporting for Reuters by Maximilian Heath and Nicolas Misculin.

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The South American country’s centre-left Peronist government unveiled the ’emergency measure’ to tamp down high inflation on Monday, putting it on a potential collision course with the powerful farm sector that drives exports.

The country’s four main rural associations said in a statement they would launch a nine-day halt in livestock trading starting on Thursday in protest and could take further measures.

“The path and the decisions that the executive branch is taking are deeply wrong,” Jorge Chemes, president of the Argentine Rural Confederations (CRA), one of the four farm associations that launched the protest, told a press conference.

“This is the beginning of a raft of measures.”

The standoff underscores the fragile balance the government needs to strike between supporting farm exports that bring in much-needed foreign currency and bringing down damaging runaway inflation that is set to near 50 per cent this year.

The tension also reflects mounting global concerns about rising food prices that have seen other countries move to control exports too, including top wheat producer Russia which has imposed an tax on exports of the grain.

The farm sector, dominated by grains including soy and wheat, has a history of clashes with Peronist governments over tax hikes and export caps, including with former President Cristina Fernandez de Kirchner, who is now vice-president.

China exports

Argentina is the world’s no. 5 beef exporter and has been increasing sales to markets like China, which has bolstered the country’s ranchers but stoked fears about inflation, especially with poverty levels soaring amid a long recession.

The country exported some 897,500 tonnes of beef in 2020 worth around US$2.7 billion, official data show. Over half of that went to China. In March shipments to China rose 8.3 per cent year-on-year to US$225.8 million, according to statistics from the Institute for the Promotion of Argentine Beef.

President Alberto Fernandez has in recent weeks criticized rising local beef prices and pointed to profit making by exporters who can charge higher prices to overseas buyers.

Omar Perotti, the governor of important farming province Santa Fe and part of the ruling coalition, said that the export ban was not the way forward and that it could harm the sector.

“The solution is to increase production and not close exports,” he wrote on Twitter. “We have the conditions to supply the internal and external market, maintaining the possibility of exporting our products to the world.”

Shares in Brazilian meatpackers Marfrig and Minerva slid on Tuesday after their operations in Argentina were hit by the ban.

Argentina is famed for its cattle ranches and sizzling cuts of steak, which are a central part of the local social fabric, with many gatherings of families and friends held around the “parrilla” barbecue grill at the weekend.

However, rising meat costs have come under fierce scrutiny in recent months. Some consumers — already hit hard by three straight years of recession — say they are no longer able to afford beef. Inflation has sapped growth and spending power.

— Reporting for Reuters by Nicolas Misculin; writing by Adam Jourdan.

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Strikes by powerful unions representing river pilots, longshoremen and soy crushing workers have been frequent at the port, about 300 km north of Buenos Aires, where some of the world’s top grain traders — such as Cargill, Bunge and Louis Dreyfus — operate.

Port reliability is key to the country, which relies heavily on farm export taxes to fund government spending, since the country has been locked out of international bond markets since its massive 2002 sovereign default.

Grains powerhouse Argentina — the world’s No. 3 corn and soybean exporter — will be counted on to help meet rising food demand as global population grows toward nine billion by 2050. So world consumers also hold a stake in the health of its ports.

Protestors have been demanding pay increases to compensate for eroding purchasing power caused by inflation in Argentina, one of the world’s highest rates, estimated by private analysts at about 25 per cent.

Union protests, among other things, have blocked bean deliveries to soyoil processing plants and help guiding ships into port.

Delays in loading ships can be costly. Docking a Panamax-sized vessel with a capacity of 65,000 tonnes of grain costs about US$13,000 to $17,000 a day, according to the Capym port industry chamber.

“Argentina, as a net exporter of grains, is subject to international prices, so any additional costs that the sector faces implies a reduction in the price that producers receive in the field, affecting the profitability of the agro-industrial chain as a whole,” said Capym director Guillermo Wade.

Wade added that “the delay in shipments causes uncertainty among foreign banks that pre-finance Argentine exporters, due to the risk that the latter will default.”

The port handles nearly 80 per cent of the grains and derivatives shipped from Argentina, the world’s top soymeal and soybean oil exporter.

Ship captains, grains inspectors and watchguards have also taken collective action recently, in some cases because of disputes among unions vying for power.

Up to 100 ships have been left waiting when strikes have gone on for more than a few days. Normally, 2,400 ships pass through the Rosario area each year.

Businesses in the sector have also complained that a range of bureaucratic hurdles, such as changes in rules governing how deep ships are allowed to go as they pass through port, have made operating in the area even more difficult.

Argentina harvested 49.3 million tonnes of soybeans and a record 32.1 million tonnes of corn in the 2012-13 season, far exceeding volumes a decade ago. Specialists say those numbers should continue rising in coming years.

Agriculture exporters have complained, however, that the sustained growth in Argentine farm output has not been accompanied by adequate port development. And they say the problem may get worse before it gets better.

The wage tensions that have led to most strikes are not likely to go away anytime soon, considering the approach that President Cristina Fernandez has taken toward Argentine inflation.

With two years to go before the end of her second term, Fernandez says consumer prices are rising at about half the rate estimated by private analysts. The disparity in statistics has been an ongoing source of tension between her government and the International Monetary Fund.

— Nicolas Misculin reports for Reuters from Buenos Aires.

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The centre-left government of President Cristina Fernandez, Kirchner’s widow, has never forgiven farmers for a 2008 revolt over the grains export taxes.

The fiery Kirchner, who called farmers “oligarchs,” was seen as a major obstacle to a more fluid dialogue. Following his sudden death last week, farm leaders are hoping recent signs of an easing in tensions will now become more evident.

“Our aim is for a better and more extensive dialogue to iron out the tensions with the national government,” said Alfredo Rodes, executive director of the Carbap group, which represents farmers in La Pampa and Buenos Aires provinces.

Some farmer advocates have seen signs of easing tensions with the government. For instance, wheat-planting permits were promised at the beginning of planting season and the government has become less strict about domestic livestock prices.

Argentina is one of the world’s biggest suppliers of grains and soy products, meaning markets keep a close eye for signs of policy changes or farmers’ protests, which could disrupt the country’s exports.

Kirchner, who died of a heart attack, oversaw the robust economic recovery that lifted Latin America’s No. 3 economy out of a deep crisis in 2001-02.

That made him popular among many Argentines, but investors disliked his confrontational style and economic policies that stepped up state control. Both he and his wife repeatedly raised export taxes on grains and curbed wheat and corn exports to ensure plentiful, cheap domestic supplies.

Fernandez has vowed to honour her husband’s economic model, of which the export taxes are a pillar. The government says they are a vital tool in redistributing the country’s farming riches among millions of poor Argentines.

But while farm leaders do not expect the taxes to be rolled back, they are optimistic for a more conciliatory tone.

“I’m hoping for a better dialogue. Kirchner was leading the confrontation, and he struggled to get out of that role,” said political analyst Felipe Noguera.

“The government could deepen (Kirchner’s) legacy, or could see the situation as an opportunity to establish new bonds,” Noguera said.

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Argentina’s once-extensive rail network was largely dismantled during the privatizations of the 1990s. But as agricultural output soars, farmers and grain elevators – who send more than 80 per cent of grains by costly road transport – are calling for investment to revive the railways.

“We’re at a big disadvantage compared with big companies that have their plants on the railway line,” said Sergio Tartara from the Cuenca Cereales grains elevator in Tres Algarrobos. “Rail is much cheaper and transport costs are a big issue for farmers.”

The high price of using trucks to move grains and a patchy network of rural roads are becoming more of a problem in Latin America’s No. 3 economy as harvests grow and farmers plant soybeans in remote regions hundreds of miles from main ports along the Parana River.

Road transport costs about seven U. S. cents per tonne per kilometre in the vast South American country – about twice the cost of rail cargo and four times what it costs to transport grains by boat, according to the Rosario grains exchange.

“Infrastructure for cargo transport is badly outdated … the railways need to play a much bigger role,” said Alfredo Sese, secretary of the transport committee at the grains exchange in Rosario – Argentina’s biggest agricultural port.

For farmers in far-flung provinces such as Salta, a fast-growing soy-producing region more than 1,000 kilometres from Rosario, transport costs eat dramatically into profit margins.

Labour-intensive road transport means farmers’ transportation costs are also more vulnerable to truckers’ pay demands. Most trade unions are calling for wage increases of about 25 per cent this year as inflation accelerates.

“It’s not the same having one driver carry 30 tonnes as having maybe three people carrying 900 tonnes (by train),” said agronomist Jorge Muriel, who works with Sanchez and Co., another grains elevator firm in Tres Algarrobos, which lies in northwestern Buenos Aires province.

BUMPER HARVEST

Farmers in Argentina, a leading global supplier of soy, wheat, corn and beef, are gathering a record soybean crop estimated at 54.5 million tonnes. Corn output is also close to record levels, pushing transport capacity to the limit.

Thousands of trucks have been waiting in line in recent weeks to reach ports in Rosario, home to about 80 per cent of the country’s soy-processing industry and the major port terminals that carry grains to Europe, India and China.

Such scenes are typical at the peak of the corn and soy harvests in Argentina, where 84 per cent of grains are transported by road.

Another 14.5 per cent is shifted by train and just 1.5 per cent by boat, according to a government report.

In neighbouring Brazil, another leading global exporter of farm goods, road transport accounts for about 67 per cent with rail and ships accounting for 28 per cent and five per cent, respectively.

Road transport is even less important for grains transport in the United States, where trucks are used to shift just seven per cent of the harvest. Most U. S. grains are transported by waterway.

INVESTMENT

In Tres Algarrobos, residents are preparing to mark the 100th anniversary of the first train’s arrival to the town even though the only reminder of the railway age is the deserted station building and overgrown tracks.

The town lies 500 kilometres (310 miles) west of the capital Buenos Aires along Route 226, which is dotted with potholes despite the provincial government’s pledges to repair it.

Lines of heavy trucks travelling hundreds of kilometres to port also make the country’s roads hazardous.

The government of President Cristina Fernandez recently launched a project to increase the depth of the Parana River, the country’s main cargo waterway, which would allow bigger, more heavily loaded boats to use it.

Officials have also pledged investment to improve cargo services on the Belgrano Cargas railway, which links Rosario to key soy-growing areas in the north such as Chaco, Salta and Santiago del Estero.

A rail renaissance cannot come soon enough for farmers, rural residents and most of all station master Abel Mosca, who has kept his job even though no cargo or passenger trains have stopped at Tres Algarrobos since 1999.

“At the moment, the tracks are unusable, but they can be fixed with political will,” he said. “I’m hopeful that sooner or later the service will be reopened.”

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Argentina is one of the world’s biggest exporters of beef, but the government has curbed shipments sporadically over the past four years in order to boost domestic supplies of the nation’s favourite food and ward off unpopular price rises.

A jump in beef costs over the past two months has raised alarm over the country’s shrinking cattle herd, which has been caused by a shift toward more lucrative crops, such as soy, and a drought that drove farmers to sell off their animals.

“The whole bureaucratic export process was flowing pretty freely in the second half of last year, but that changed dramatically at the end of December, when the price rises caused the flow to be slowed considerably,” one source at a leading meat-packing plant said, asking not to be named.

Government export curbs on beef, wheat and corn are a leading gripe among the country’s farmers, who have staged a series of strikes and protests over the agricultural policies of President Cristina Fernandez.

They say farmers have decided to run down their herds and turn their land over to soybeans because of policies that have made ranching unprofitable and have failed to stem inflation, which private estimates see at about 20 per cent this year.

However, government officials have sought to play down the recent price hikes. They say recent rains have encouraged ranchers to leave their animals out to graze, instead of sending them to market.

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Argentina is a top world supplier of soy, wheat, corn and beef but its farming industry is having to use private estimates as routine data from harvest forecasts to corn sales are pulled from official websites or sent out weeks late.

The monthly crop report for March was posted by the Agriculture Secretariat 12 days late on March 30, only to be withdrawn hours later because “it is a preliminary document that contains errors.”

Critics say President Cristina Fernandez’s centre-left administration has been underreporting inflation for two years and analysts say recent economic growth statistics have been overly rosy as the global crisis kicks in.

Key energy data, state welfare statistics and some poverty-related figures have vanished, analysts and social groups say.

Agricultural data started disappearing last year, making it increasingly difficult for grains exporters and growers to plan their businesses and aggravating a bitter year-long dispute with the government over export taxes on soybeans.

“The issue is getting more and more serious. These figures have to be public in a normal economy so everyone involved in business can plan their activities and future investments,” said agricultural analyst Pablo Adreani from the Buenos Aires-based consulting firm AgriPac.

FOUL PLAY?

The debacle over the closely watched monthly crop production report will deepen critics’ suspicions of foul play at the Agriculture Secretariat.

The withdrawn forecast for the soybean harvest estimated production at between 37 million and 39 million tonnes, far lower than other private forecasts and that of the U. S. Department of Agriculture, or USDA, an industry benchmark.

“Everyone uses the production data. It’s very important for anyone involved in the market to know what a country’s grains supply is, even more so when it’s an exporter like ours,” said Patricia Bergero, an analyst at the Rosario grains exchange.

“It’s a shame the secretariat has become less efficient than it used to be on this issue,” she added.

Statistics published by the government for years have been disappearing since the Agriculture Secretariat ceded control of the grains and beef trade to another state agency, the ONCCA, in mid-2008.

Gradually, the Secretariat has stopped updating routine tables detailing weekly grains export commitments and purchases by soy crushers. Weekly corn and wheat sales, with details of buyer countries, have not been published since last June.

Some new information has been posted in its place, but it smells like a conspiracy to grains exporters, meat packers and farmers, whose relationship with Fernandez seems irreparably damaged after months of conflict.

They say the government is withholding data and introducing new export procedures to give it greater leeway in its battle to control domestic food inflation.

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Farmers in the agricultural powerhouse halted sales of soybeans, other crops and livestock for seven days, bringing local grains and cattle markets to a standstill and helping drive U. S. soy futures to a five-week high this week.

Despite the end of the strike, farm leaders said they would keep on fighting the soy levies as the country prepares for mid-term elections in June, seen as a key test for President Cristina Fernandez.

“What we want is a sensible about-face on agricultural policy … the level of export taxes is central to that,” Eduardo Buzzi, head of the Argentine Agrarian Federation, told a news conference after meeting fellow farm leaders.

In an interview with Reuters, Buzzi said farmers see the June 28 congressional vote to renew half the lower house and a third of the Senate as a chance to build political support to reform the soy export taxes.

Farmers are trying to get lawmakers to back an opposition bill to lower the soy levy, but the ruling party’s congressional majority has allowed government allies to block the proposal.

“We will insist in Congress for the export tax system to be modified,” Hugo Biolcati, president of the Argentine Rural Society, said after Friday’s meeting.

The farmers did not rule out fresh strike action in the future, however.

U. S. soybean futures fell sharply March 27, with the end of the strike in Argentina contributing to the losses.

Argentina is the world’s No. 3 soybean exporter, after the United States and Brazil, and it is the leading supplier of soyoil and soymeal.

This year’s harvest began in recent weeks and output is set to fall from last year’s 46.2 million tonnes due to a harsh drought that has battered wheat and corn crops.

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