After a year that ended with declining farm prices, as a result of the vicissitudes of the drought2023 started with a recomposition that threatened to recover lost ground.
However, after three months and with better weather prospects, uncertainty dominates the spirit of livestock producers.
From the finance consignment sector, there are those who affirm that, as a result of the lack of pastures, at least for the next three months there will not be a “normal supply” of animals for consumption. For others, the expectations will be different depending on whether or not the producer has food.
Greater number of animals sent to slaughter
It is worth putting the situation in context. Failures in pregnancy and a low body condition caused a greater number of animals to be sent to slaughter in recent times, which had an impact on the values.
However, in the first two months of the year there was a significant rise in winter, which later –through a heat wave– slowed down.
In the first auction of 2023 of the firm Consignaciones Córdoba in the Rural Society of Jesús María, $420 per kilo was paid for the calf of up to 150 kilos. In the last week, its price was $560 per kilo: 33% more.
“The uncertainty for what is coming is total. It will be necessary to see what happens with the offer of ‘fat’ and with the wintering. I believe that, due to the drought, wintering has been 30% earlier than what is normal every year. Today it is below or the same as the farm for slaughter. As the rains become more widespread, the winter supply will decrease. That will improve the price. But there is a marked uncertainty,” said Miguel Talano, from Talano Hermanos.
“I think that for the term of two or three months there will not be a normal supply of fat, due to the lack of grass and grains due to the drought. Three months from now, when there can be food and fatten the ranch, there may be more supply of fat. Momentarily, the prices of cattle destined for slaughter will be maintained, ”he added.
However, for the Río Cuarto consignee, the horizon could clear up. “Expectations are good. It depends on China, which accounts for 77% of exports, and on domestic consumption. The purchasing power of the people matters a lot, ”he maintained.
Talano, for whom the price of the farm never has the behavior of inflation, pointed out that the wintering is being sold with a long term and in installments.
The outlook to come
On the future outlook, he warned: “The breeder who raised and sold steers for export is going to need time to recreate and fatten them. Today there is little supply of that steer. The problem will come next year, due to the pregnancies. There is a lot of cow that did not get pregnant, a lot of cow that was sold early”.
Pedro Pérez, from Consignaciones Córdoba, predicts a year with uncertainty, mainly due to the shortage of fodder (grains and pastures). “This is going to be a strange year, because although it rained now, many feedlots The weather complicated them. In our area, there is a lot of corn that has already been lost and many producers have chopped to get some fiber. It will be difficult this year to have grain ”, he indicated.
Regarding current prices and conditions, he pointed out: “We sell the calf for the same amount of money or less than last year. The producer who is a buyer chooses a lot and I don’t even tell you if he has a deadline, which today has a lot of impact. It is going to be a tight year regarding the price”.
“In 90 days we will have a super offer of ‘gordo’. And I don’t think anything happens with the price. It will continue like this or even cheaper. Next year we will see some change,” added the consignee, who warned that the dry season is noticeable in the drop in calvings. “There is less calf. Parity will be 20% or 30% less”.
Therefore, he indicated that due to the shortage of grains “holding a calf until 2024 will be business.”
“In our area, they have hit a ‘bombshell’ with the issue of corn. And if you don’t have… a kilo of meat in feedlot represents 10 kilos of corn,” he said.
On the horizon for 2023, he warned: “This year without corn, we don’t know what will happen, therefore we don’t know where the price of ‘gordo’ will be. Today the numbers close because corn is not expensive, but…”.
For the analyst and consultant of the cattle market Víctor Tonelli, who maintained that the prices of the ranch are “plateau”, there will not be substantial modifications in the values until after the winter.
“Until the end of winter, and if it rains well, I think prices will change a bit, but always running behind inflation,” he said.
José Jofré, representative in Córdoba of the consignee Gananor Pujol, presented his vision on prices and what can happen in the future. “The rise in the price that occurred this year changed the general mood a bit. What happens is that the hacienda has been having a big delay. From January to December of last year, it increased by 50%, but with inflation that exceeded 100%. In other words, this delay has only been corrected by 30% so far this year, ”he said.
“On the other hand, the purchasing power of the people is hit hard, so there is no room for it to rise much more. It is like a tug of war from both sides ”.
According to Jofré, the fattening business is the most complicated due to the lack of pasture and grain prices. “The prospects are not the best. Just now there were rains, but a little late, because when the heat decreases, it is not enough for the pastures to sprout. And in a month frosts begin to come. Also, the next grain harvest is going to be weak. So, little grain and little grass are going to stress the market”, he pointed out.
“Regarding wintering, there was an increase in prices and it reached good values. But, quickly, as the drought increased and a lot of farms began to come out during the harvest season, due to a supply and demand issue, the price began to fall. The trend is for these values to be maintained for the next few months because there is a lot of supply, ”he closed.