Exports to China boosted the beef sector’s performance in Argentina and Uruguay. The volume of shipments out of Argentina was higher than in 2018. In Colombia and Paraguay, performance indicators declined. See how the market performed in each country:
Argentina – Exports out of Argentina totaled 569,000 tons, a volume 56% higher than the previous year, raising annual revenues from foreign sales by 61% to US$ 3,102 million, the highest level ever recorded in the country. The performance reflects a 22% increase in acquisitions from China, the destination of 70% of the country’s beef shipments.
Slaughter rate in Argentina increased by 4% between 2018 and 2019, totaling 13.9 million head, with the performance in the domestic market, again impacted by the economic crisis, affecting the purchasing power of the local population and consequently restricting beef consumption. It was a year marked by a sharp increase in the price of Argentine cattle, in local currency: the average price rose 61% in the year, reaching 117.0 Argentine pesos per kg, due to the effect of inflation.
On the other hand, affected by the currency devaluation of approximately 60% in the year, the average price of cattle was US$ 2.4/kg in 2019, a decrease of 11% compared to 2018. Nonetheless, due to its efficient cost structure, Argentina remains one of the most competitive global producers of beef.
Uruguay – The country has increased its export volume by 4% from 2018 to 2019, shipping 339,000 tons, a move that consolidated China as its main destination. The Asian country increased its purchases by 16%, compared to the previous year, making up 61% of the total exported by the country.
In the cattle market, there was a strong increase in prices. The average price of cattle reached US$ 3.8/kg, an increase of 12% compared to the previous year as a result of the increase in exports, combined with a drop in slaughter: 2.2 million head, 5% lower than in 2018.
Paraguay – The beef sector in Paraguay experienced a downturn in 2019. Slaughter fell by 7% from 2018 to 1.8 million heads, primarily because the country faced adverse weather conditions in the first half of the year that prevented the animals from being transported to the slaughter plants.
In the domestic market, the average price of cattle closed the year at US$ 2.7/kg, 16% lower than in 2018. In exports by the Company, the volume of shipments fell 4% annually and revenues of US$ 1,034 million were 6% lower than the previous year. Chile continues to be the main destination for Paraguay’s exports, with 36% of the total amount.
Colombia – The colombian market faced issues after cases of foot-and-mouth disease were detected in 2017. This situation caused the sector to close the year of 2019 with a 4% reduction in relation to 2018, totaling 17,300 tons of beef exported. Export revenues totaled US$59.0 million in 2019, a 17% decrease in annual comparison.
Russia has remained the main destination for Colombian exports, with 36% of the share, followed by Libya and Jordan, both with 15% of the exports. In fourth, responsible for 14%, exports to Egypt.
Colombia has a tremendous growth potential with a quality herd of approximately 24 million head, several free trade agreements with important markets and access to the Pacific and Atlantic oceans, which facilitates the flow of production. The strong momentum in the sector is reflected in the recent export certification achieved, such as to Saudi Arabia, one of the main halal meat consuming markets in the world, which opened its market for Colombian beef in November 2019.
The gross revenue of the Athena Foods Division, that includes the operations of the units located in Argentina, Colombia, Paraguay and Uruguay totaled US$ 1.9 billion in 2019, 6.7% more than in 2018. Adjusted EBITDA was US$ 163.7 million, with an adjusted EBITDA margin of 9.0%.