Monday, August 8

Feedlots in crisis: will there be a lack of more meat?


…that, With more than 40% empty corrals, the lowest level in the last 4 years, the situation of the feedlots that are in charge of supplying the bulk of the meat supply in the large consumption centers, would be confirming the forecasts of an upcoming possible additional firmness of the market, both due to the additional flows of liquidity (pre-selection) from consumption, as well as the increase in demand in December due to the Holidays and holidays. In this context, also the dry season, and the current heat wave, would have a negative impact on the speed of fattening, and on costs, including those that are grass-fed. Also, the replacement index of the feedlot, of 0.78, that is, less than one head for each animal that is removed fat, indicates the tension that this link in the meat chain has, whose main inputs, corn and calves go through a period of very strengthened prices, which determines a strongly negative gross margin that is driving market activity. This is due, among other things, not only to the increase in costs, but also to the fact that the nominal price of the standing farm (fat) fell 13% from the first half of May to the end of October, despite the inflation in that period. Even with this, “the meat counter prices did not drop what the authorities intended, but they did not rise until now,” says analyst Ignacio Iriarte, who believes that there may be changes after the November elections.



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