A study by the Mediterranean Foundation 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 were 80% above 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 variation that looks very high but in terms of local inflation (109% for the same period). " It implies an adjustment in real terms of 15%, that is, a significant reduction in the price of the product," the report said.
According to the work, there are external and internal factors that influence this loss of value. Regarding the external context, the drop in international beef prices compared to the previous year, the average price of the ton exported this year is 27% below the price observed in the first four months of 2022.
And as for local factors, on the supply side, drought and lack of sufficient feed for animals, it has forced many establishments to accelerate and increase discards and shipments to slaughter. And, on the demand side, there is a complex macroeconomic scenario for consumption, which combines a fall in the purchasing power of the incomes of various social segments (wage earners, retirees, self-employed with low productivity, etc.) and a very low level of confidence regarding the economic future.
"Under this scenario, which combines a greater supply of meat with lower international prices and a contained domestic demand, it seems difficult for meat prices to recover, in real terms, during the coming months. Good news for the consumer, not so good for the farmer and meat, "they remarked.
Comparison
In the comparison between Uruguay and Argentina, based on prices of public bodies and mixed institutions, 12 cuts of beef final consumer level and values for the month of April, it is found that the average price of this basket was USD 9.4 per kilo in Uruguay and USD 8.3 per kilo in Argentina (in both cases at the official exchange rate). that is, on average, meat in Argentina was 12% cheaper than in Uruguay.
This gap was smaller than that observed in the last months of 2022, when it was close to 30% (in favor of Argentina), but it should also be noted that, during other moments of the not so distant past, meat in Argentina was more expensive than in Uruguay (for example, +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 US $ 12.4 per kilo in the neighboring country, while US $ 9.8 per kilo in Argentina. For the reference 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 had reached 39%, always in favor of Argentina.
Finally, in relation to the comparison between Argentina and Brazil, they resorted to online prices of supermarkets since in the neighboring country they were able to access a price base of cuts of meat from official sources and / or institutions of the chain as in the other countries.
The comparison with Brazil is limited to the values of online supermarket stores. In this case, by size and regional diversity of Brazil, prices were surveyed in more supermarkets and / or online stores, the cases of Carrefour, Pao de Azucar, SuperMago, Mambo, Club Extra, SuperPrix and Boa Supermarket for a set of 8 cuts of meat, taking the average values obtained.
The average price of these 8 cuts is $2,545/kilo in Brazil, below the average value of $2,687/kilo in Argentina in the third week of May.
Survey of online stores
IERAL also conducted a survey in online supermarket stores in the third week of May, in order to incorporate Brazil in the comparison of beef prices in the region. In this measurement, which reached 16 supermarkets and more than 150 prices of beef cuts, the price of a basket of 8 cuts of medium/high quality was $2,687 per kilo in Argentina, $2,545 per kilo in Brazil, $3,174 in Uruguay and $3,555 in Chile.
"These prices in online supermarket stores reveal that the country continues to have, as in previous measurements, beef cheaper than in Uruguay and Chile and that it is 5%-6% above the prices of Brazil," summarized the work.
It should be remembered that Brazil is an export leader and is probably the most competitive (lower costs) in terms of farm and beef prices worldwide. "Although these are consumer prices, note that the value gap with Brazil is so small that an eventual importation of cuts from that origin, considering the logistical costs of putting that merchandise in the country, would have very little effect, if any, on the domestic prices of the product," the report concluded.
