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

La Nacion ( translated )

Buenos Aires has areas with excellent conditions that allow high levels of 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 stock 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 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 secretrario 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 common  choice for young farmers to get started in livestock activity.

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

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

In this context, Argentina participates only in a small portion of the export market for sheep meat and 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 very difficult to achieve such levels in the fields of Patagonia.

EXCELLENT CONDITION

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

Several factors contribute to this situation, but worth mentioning in commercial uncertainty facing all producers who decide to venture into the business. Few operators dedicated to 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 main beneficiary is the informal marketing based on opportunism and information asymmetry between parties.

The sheep sector, like few others in the country between 2000 and 2002 achieved a diagnostic process of limiting and formulate proposals that has resulted in the highest aspiration citizens of any member of a productive sector: the enactment of a specific law that meets ones needs.

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

Markets are. Southern Brazil is here no more, demanding. Prices fluctuate. In 2010 and 2011 values were excellent, 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.

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