Any similarity of these considerations to reality is the result of the author’s bad intention.
OF THE PRODUCTION
Very low weight extraction: (from always) by lower relative profitability, long winter pastures were moved to pasture excluding cows, steers and heavy heifers for export to short-term fattening, more efficient the lighter and higher price per His tenderness. The Feed Lot (50% of the supply) is a fast rotation business of cheap calves and maize, or friendly subsidies (recent). There is no country in the developed world with light consumption.
Very low extraction in heads: (always) by Inefficiency of a breeding with less than 60% of weaning aggravated by the lower relative profitability that displaced the breeding to fields of less agricultural aptitude and marginal zones without the improvements compatible with the increase of requirements of Biotypes (recent).
Stratification of tenure: (always) 80% of producers have less than 300 cows including 50% who have less than 100; Which excludes economies of scale and limits access to available technology, including low-cost technology, because process technology requires well-trained trained personnel (Figure 1)
Productive system: (since always) gender abuse: more than 70% of producers without sufficient replacement due to their high cost, without parked services, without touch and without gap, that affect an excess of malnourished load that is pregranted every two Years (aggravated by gigantism).
Lack of investment in infrastructure: (recent) long-term, marginal and medium-term breeding for wintering in pasture, in fields that lost it for not being able to compete with soybeans requiring less than a third of working capital In less than a third of the time, to produce twice the income of the heavy steer.
Lack of training: (always) Technical information is what is left over, dissemination is what is missing. Lack of massively-funded funded programs and sufficient economic incentives for proper implementation
Sanitary limiters: (always) insufficient, incomplete and non-compliant disease control programs.
Intermediation: (always) Consignees in direct sales or sales, are most interested in expanding demand, transparent prices, stimulating competition, financing and controlling the solvency of buyers. They are the natural representatives of the producers, especially for the small ones that load mixed. Unfortunately, they do not extend their services to the control of performance and quality in their direct referrals.
Lack of guarantees: (always) The legal framework of commercial transactions favors the impunity of breaches.
Lack of integration: (since always) higher costs limit the access of the export to the circuit of consumption as well as the health requirements exclude from the export to the consumption circuit; Preventing the integration of both markets to take advantage of the singularity Rioplatense. In the butcheries of the interior at prices of 2005 and until now, the tenderloin (12 $ / kg) is only worth 25% more than the roast (9 $ / kg). If you compare it without bone or fat, a third less. An export refrigerator sells the roasts at half that price and the loin at three times. Subsidy at the table of the richest. There is no country in the developed world with a double market. In USA a steak is worth 4 times more than a buttock and 10 times more than the empty.
Chain of consumption: (always) It is highly competitive, it handles the demand with the price margin, it holds it when there is scarcity and it sustains it when it is left over. There are two chains that distribute the market: a formal chain with exporting refrigerators, slaughterers, suppliers and supermarkets that comply with sanitary, labor and fiscal standards; Another with informal refrigerators with lower sanitary requirements and a complex network of slaughterhouses, slaughterhouses, suppliers and butchers, “uncontrollable” that when not working in gray work in black. Poor fiscal transparency, fewer health controls and informal work allow lower operating costs but also favor the consumer. The political boxes and local labor protect them. There is no country in the developed world with double sanitary, fiscal and labor regulations.
Lack of cold: (since always) there is not sufficient capacity of cameras or working capital to finance the maturation of the meat, which conspires against the increase in weight of work in consumption. There is no country in the developed world that does not mature expensive cuts less than 15 days ..
Export chain: (always) export industry was always allied with governments in any attempt to reduce the price of the farm (its main input) by limiting competition through the “Box cutting”, “box beef”, “closures”, elimination of markets (Liniers), consignees, exporters without factory, cycles II, producers / exporters, etc. Extending payment terms, up to strategic calls. Scale wars such as those of meat in the 20’s or those of the horses in the 60’s (3 of 30 slaughterers left) or both, such as the current closure of more than 100 companies and the dismissal of 17,000 workers (placated by the Hourly guarantee). Luckily, there is still more industrial competition here than in the USA, or in Brazil, or in our dairy. Gilbert Keith Chesterton quipped that the best existing system of production was capitalist, but lamented that there were not enough capitalists. The father of liberalism, Adam Smith, was concerned about the danger of lack of competition.
Lack of industrial profitability: (always) by idle capacity caused by the reduced supply of heavy goods, the insufficient exchange rate and the competition of the informal circuit. ROES (discretionary export authorizations that jeopardize the predictability of shipments), cockroaches (supply-to-lost obligations) and withholdings exacerbated the previous situation. Except for exceptions, which are counted with the fingers of one hand, there were no genuine investors. They grew up modernizing their plants with the reinvestment of profits when there were. They helped with the credit of the producers and the capital of the creditors of the calls; In spite of which they are more the entrepreneurs who were fused, very few are still solvent, and less those that withdrew with silver. Repeated situations of economic and legal insecurity that did not offer guarantees for genuine investment.
Lack of capacity of work enabled: (always) to integrate the task of consumption with the export. Only 20 refrigerators concentrate 20% of the work, 45 25% and 350 the remaining 55% (Chart 2), but the vast majority do not meet the sanitary conditions for an export operation. The greater the concentration of exports: 70% of the Hilton quota is concentrated in 10 companies (figure 3). 90% of the canned in a company. Thus it is not difficult to explain why the same product (conserves) sold for 0.20 U $ / kg. During the great drought, thanks to timely closed export, it is now sold (2010) at 1U $ / kg thanks to the competition of the cow greenhouses. .
Lack of regional plants: (since always) when the hacienda moved only by rail and rail the great industry is located in proximity to the ports and the great markets of consumption. The proximity to the production areas, with a lower volume of cold freight and with a cheaper local labor force, is wasted.
The shortages always revealed to the authorities; From the dairy of 1700 until today. They can only be solved in the short term with substitutes and in the medium term with production increases that require more profitability. The problems were insoluble when consumed more than 100 kg per capita and there were no substitutes. In the 50’s the price of roast that was equivalent to chicken, today triples.
The social resentment against the vacant oligarchy, the anti-liberalism and the protectionist statism favored by the nationalists, the deterioration of the terms of trade verified by the Cepalistas in the crisis of the 30, justified the substitution of the agro-export model for an industrialist of substitution of Imports created by a statist populist political system financed by a gigantic transfer of agricultural income and inflation. Thanks to the contribution of the extraordinary dynamism of agriculture, the populist system still exists (seven decades). The failure of almost all imaginable liberal economists justifies the decline of living with our own.
Low relative prices: (always, recently aggravated) Supported by population, politicians and industrial entrepreneurs, the state implements income transfers, to subsidize, reduce the cost of industrial labor and agro-industry inputs, through Price controls, export closures and limitations, low exchange rates (Menem Dollar was worse than withholdings) and / or withholdings. Perón’s IAPI was his best accomplished expression that subsequent governments emulated until the current lethal culmination.
Traceability: (recent) A collective suicide unnecessarily urged by the concealment of foot-and-mouth disease. Most of the producers are excluded from the export due to inadequate individual traceability to our conditions; Copy of the implemented by the EEC to avoid corruption in the allocation of subsidies per head and find mad cows. We do not have either one or the other, but we have the “Systeateros”. For the producer, and for the producer, particularly for the boy, it means a cost of computerization, planning and filing of cumbersome tracking documentation, mangas and bruises before loading, bricks in the ear of the calf at the foot or precocious weaning, endless local processing of each document Of transfer, more than half a million days of work lost. Records veterinarians whose controls are not performed but are paid the same.
For the state, its management and control are costly, incomplete and inefficient. It is almost impossible to extend individual identification to the entire national rodeo to be potentially exportable without a sidereal cost; Main and priority requirement to solve. No country in the developed world has a double supply market.
Double sanitary market: (since always) most of the plants of consumption are excluded from the exportation due hygienic sanitary restrictions and traffic regulations. Export ratings demand investments and costly transparency. No country in the world has a double sanitary standard.
Lack of incentives for improvement: (always) except the limited recognition of the consumer market, in the export does not value neither the heifer nor the heifer quality and devalued the new cow. Our typification that was copied from that of the steers for Smithfield in the twenties (La Blanca), besides being obsolete today, is not controlled (heels are often “weighed” in detour of sanitary rail, before the stage). It is a useless cost without commercial recognition because it is not rewarded in the payment system. The performance to the hook (they punish it with the dressing) and the one of the disrobing, in spite of being the most important, is ignored it as the quality. The same is true of a quarter of a mouth full of islands than a tooth of heavy milk of grass. The industry is afraid to discriminate by performance to the disheartened one who pretends to ignore, because the worst compensates the best to make an average. From the lack of commercial stimuli, it is clear that the producer does not classify his remissions of cows, guaranteeing at least dentition and pregnancy.
Lack of quality: (recent) Of the traditional high quality of the Argentine meats only remains the fame; Our restaurants have not announced “export meat” for some time. In the smallest amount, organic and also Angus (with quality attributes) are certified. The exporters who had differentiated brands, massified them losing international recognition. Anonymously export the cheapest weight available because it can not compete with quality consumption. There are tacit qualifications between consumers, butchers and suppliers; But there is no official directive to promote it or studies that justify it. We rule the leveling down (the bible and the heater).
Tax regime: (from always) bad coparticipado, little federal and less municipal. Taxes have less impact on fixed costs per head and more on variables, which does not encourage a greater weight of work. Withholdings, or the exchange rate, do not encourage increases in production because they are a fixed ceiling at the price of the final product that limits the marginal benefits.
Dressing: (since always) There is an official regulation that stipulates the desgrase of the cattle before the weighing box but it is not controlled. It is not fulfilled by the export to reduce the yield of purchase. The killers, on the other hand, do not let them touch the beef because they transfer the fat to the butcher.
Hilton: (since always) Poorly transparent distribution based on variable criteria such as labor, Past-performance (total value exported) and others that do not promote the exported quality. Erroneous definition of the auto production system established by a representative of the corporation in the JNC to avoid the competition of the Continental: only new steers (light) finished to pasture. Although never controlled or enforced, no country is self-limiting,
Lack of Information: (always) scarce and incomplete. Hiding the information always means power so that the officials become essential. Now it is imperative to bypass compromising evaluations. The quota distribution criteria and monthly exports by product, price, destination and plant, if any are not available. This lack of information captures arbitrariness and conspires against the design of consistent policies. For example, the ratio of calves to total females is a more accurate indicator than that of the proportion of females over the whole work that would have been predicted by the pre-drought settlement. There are scientific publications in the universities but none specialized in meats with commercial magazines and international techniques, the best, the JNC has rotted in the gardens of the SAGYP and the SRA has long canceled its subscriptions.
Luis de Santa Coloma, Noviembre 2015