Sheep rearing is an opportunity that Argentina no longer takes advantage of

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Buenos Aires Province has areas with excellent conditions that allow high levels of sheep production, but this does not happen, Why?

In the late nineteenth century, the country was in what later became known as the “golden age” of Argentina sheep production.

At that time, the province of Buenos Aires had a stock of 52 million sheep heads, a figure that exceeded seven times the supply of cattle at the time. Until 1930 the activity had its heyday, with excellent European demand for wool and meat.

The sheep, as in much of the world, accompanied man in the process of colonization and population, with the support of family savings for its unique ability to simultaneously supply meat, wool, hides and milk (in the words of Dr Javier de Urquiza Former secretary of Agriculture’s Office and sheep producer, “the sheep manager”).

The first activity developed many immigrants who settled in the rural settlements,  who were the Irish and French. Even a few years ago, it was a common choice for young farmers to get started in livestock activity.

Times have changed. Directed by the development of synthetic fibres derived from petroleum has been a reduction in the global stock of sheep and a specialization in the production of wool and meat. In Argentina, the existing stock is now mainly concentrated in the Patagonia region in the South.

International trade in sheep meat is dominated by New Zealand and Australia, who together are responsible for 70 per cent of export volume and supply significant markets.

In this context, Argentina participates only in a small portion of the export market for sheepmeat. It makes it a premium product with high value as a function of the particular rearing conditions that occur in Patagonia and a local supply chain that has reached a good level of development, mainly in the southern province of Santa Cruz.

Subject to being strategically sustainable and, where possible, the increase of niche markets, the ability to compete with the big players of sheep meat is linked to the development of a production line with high levels of productivity (eg, New Zealand, which doubled on average lambing numbers). For many interrelated factors, among which strongly emphasizes the environmental aspect, it becomes tough to achieve such levels in the fields of Patagonia.

EXCELLENT CONDITION

Argentina, mainly the province of Buenos Aires, has areas with excellent conditions that would achieve high production levels. However, this does not happen, and it is increasingly unusual to find farmers whose main occupation is sheep flocks beyond their own consumption.

Several factors contribute to this situation, but worth mentioning that commercial uncertainty faces all producers who venture into the business. Few operators dedicated to an industrial area, lack of training places and reference prices and unclear marketing bases seem to form a picture of the situation in stable equilibrium, whose primary beneficiary is the informal marketing based on opportunism and information asymmetry between parties.

Like a few others in the country between 2000 and 2002, the sheep sector achieved a diagnostic process of limiting and formulating proposals that have resulted in the highest aspiration of citizens of any member of a productive industry: the enactment of a specific law that meets one’s needs.

That instrument, envied by most relevant country producers that Argentina sheep, should be the backbone, the area from which producers and State working together to achieve change.

Markets are. Southern Brazil is here no more, demanding. Prices fluctuate. In 2010 and 2011, values were excellent, and prices in 2012 were not good, but this is nothing new for the farmer: by definition, risk-taker. What we do not want, you do so in a context of uncertainty as to the outcome variables relevant to their production.

Until the political winds change, local sheep farmers are doomed to more of the same.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.

The Gateway Team – When You are Serious About Property

www.gatewaytosouthamerica.com

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Post available in: English

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