ARGENTINEAN cattle analysts are forecasting a strong rise in live cattle prices (already seen in cows) for 2010 and 2011, given the significant tightening in supply, robust domestic consumption and pick-up in international demand.
Local agents estimate that low cattle prices have bottomed-out, and that supplies will become very tight into the final quarter of 2009.
Some producers have already started holding onto cattle despite the urgent need for cash flows, given the strong expectation for prices to improve.
The drop in cattle and beef supplies comes as a result of an estimated 5pc decrease in the local cattle herd in 2009, with around 60-70pc of the breeding herd reportedly in poor condition due to the drought.
Since 2006, the Argentine cattle herd has contracted 15pc, with the high slaughter of female and poor calving rates adding to the decline.
Cattle turnoff and beef supplies for the first eight months of 2008 were at a record high, up 12pc year-on-year, which helped to maintain low prices and a surplus for exports.
However, the United States Department of Agriculture has forecast a 30pc decrease in exports for 2010, and although there is no consensus in the local industry, it is recognised that, exports will drop, as domestic beef prices rise and the government tightens export controls.
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