The move comes months before key mid-term elections, with centre-left President Alberto Fernandez keen to avoid a sharp rise in the cost of beef in a country where families regularly gather to cook meat around the “asado” grill.

Spiraling consumer prices could hurt his party’s chances with voters in the South American country already feeling the impact of the coronavirus pandemic.

The government had in June limited exports of some beef cuts until the end of the year, sparking tensions with farmers. A cap until the end of August on beef shipments at 50 per cent of the previous year’s level has now been extended by two months.

“In the short term, the tool of limiting sales abroad is essential to guarantee Argentine access to beef in the face of the sharp increase in prices for consumers,” it said in a decree in the official gazette.

Argentina is the world’s fifth-largest beef exporter and a key supplier to China. It is the top global exporter of processed soy and a major wheat and corn producer.

Jorge Chemes, president of the Argentine Rural Confederations, said that farm bodies would meet before deciding what action to take. He threatened rallies and trade halts.

“I’m certain we will have something along the lines of a trading halt,” he told a press briefing.

Lost millions

The president of Sociedad Rural Argentina (SRA), Nicolas Pino, said members would meet on Wednesday and Thursday and could then announce a commercial strike.

Earlier this year, protests by farmers led to the national livestock markets closing.

Argentina has suffered from high inflation for years, with the annual rate running above 50 per cent, and has started to emerge this year from a recession since 2018.

Miguel Schiariti, head of Argentina’s CICCRA meat industry chamber, told Reuters the sector had lost around US$100 million in exports last month due to the caps, which could push up prices.

Another industry source said that they handed momentum to other producers.

“The government does not understand the damages of extending the cap, since the industry has lost millions of dollars with the restrictions so far and it is a way to continue giving markets to other countries,” he said.

— Reporting for Reuters by Maximilian Heath and Nicolas Misculin.

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The South American country’s centre-left Peronist government unveiled the ’emergency measure’ to tamp down high inflation on Monday, putting it on a potential collision course with the powerful farm sector that drives exports.

The country’s four main rural associations said in a statement they would launch a nine-day halt in livestock trading starting on Thursday in protest and could take further measures.

“The path and the decisions that the executive branch is taking are deeply wrong,” Jorge Chemes, president of the Argentine Rural Confederations (CRA), one of the four farm associations that launched the protest, told a press conference.

“This is the beginning of a raft of measures.”

The standoff underscores the fragile balance the government needs to strike between supporting farm exports that bring in much-needed foreign currency and bringing down damaging runaway inflation that is set to near 50 per cent this year.

The tension also reflects mounting global concerns about rising food prices that have seen other countries move to control exports too, including top wheat producer Russia which has imposed an tax on exports of the grain.

The farm sector, dominated by grains including soy and wheat, has a history of clashes with Peronist governments over tax hikes and export caps, including with former President Cristina Fernandez de Kirchner, who is now vice-president.

China exports

Argentina is the world’s no. 5 beef exporter and has been increasing sales to markets like China, which has bolstered the country’s ranchers but stoked fears about inflation, especially with poverty levels soaring amid a long recession.

The country exported some 897,500 tonnes of beef in 2020 worth around US$2.7 billion, official data show. Over half of that went to China. In March shipments to China rose 8.3 per cent year-on-year to US$225.8 million, according to statistics from the Institute for the Promotion of Argentine Beef.

President Alberto Fernandez has in recent weeks criticized rising local beef prices and pointed to profit making by exporters who can charge higher prices to overseas buyers.

Omar Perotti, the governor of important farming province Santa Fe and part of the ruling coalition, said that the export ban was not the way forward and that it could harm the sector.

“The solution is to increase production and not close exports,” he wrote on Twitter. “We have the conditions to supply the internal and external market, maintaining the possibility of exporting our products to the world.”

Shares in Brazilian meatpackers Marfrig and Minerva slid on Tuesday after their operations in Argentina were hit by the ban.

Argentina is famed for its cattle ranches and sizzling cuts of steak, which are a central part of the local social fabric, with many gatherings of families and friends held around the “parrilla” barbecue grill at the weekend.

However, rising meat costs have come under fierce scrutiny in recent months. Some consumers — already hit hard by three straight years of recession — say they are no longer able to afford beef. Inflation has sapped growth and spending power.

— Reporting for Reuters by Nicolas Misculin; writing by Adam Jourdan.

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Strikes by powerful unions representing river pilots, longshoremen and soy crushing workers have been frequent at the port, about 300 km north of Buenos Aires, where some of the world’s top grain traders — such as Cargill, Bunge and Louis Dreyfus — operate.

Port reliability is key to the country, which relies heavily on farm export taxes to fund government spending, since the country has been locked out of international bond markets since its massive 2002 sovereign default.

Grains powerhouse Argentina — the world’s No. 3 corn and soybean exporter — will be counted on to help meet rising food demand as global population grows toward nine billion by 2050. So world consumers also hold a stake in the health of its ports.

Protestors have been demanding pay increases to compensate for eroding purchasing power caused by inflation in Argentina, one of the world’s highest rates, estimated by private analysts at about 25 per cent.

Union protests, among other things, have blocked bean deliveries to soyoil processing plants and help guiding ships into port.

Delays in loading ships can be costly. Docking a Panamax-sized vessel with a capacity of 65,000 tonnes of grain costs about US$13,000 to $17,000 a day, according to the Capym port industry chamber.

“Argentina, as a net exporter of grains, is subject to international prices, so any additional costs that the sector faces implies a reduction in the price that producers receive in the field, affecting the profitability of the agro-industrial chain as a whole,” said Capym director Guillermo Wade.

Wade added that “the delay in shipments causes uncertainty among foreign banks that pre-finance Argentine exporters, due to the risk that the latter will default.”

The port handles nearly 80 per cent of the grains and derivatives shipped from Argentina, the world’s top soymeal and soybean oil exporter.

Ship captains, grains inspectors and watchguards have also taken collective action recently, in some cases because of disputes among unions vying for power.

Up to 100 ships have been left waiting when strikes have gone on for more than a few days. Normally, 2,400 ships pass through the Rosario area each year.

Businesses in the sector have also complained that a range of bureaucratic hurdles, such as changes in rules governing how deep ships are allowed to go as they pass through port, have made operating in the area even more difficult.

Argentina harvested 49.3 million tonnes of soybeans and a record 32.1 million tonnes of corn in the 2012-13 season, far exceeding volumes a decade ago. Specialists say those numbers should continue rising in coming years.

Agriculture exporters have complained, however, that the sustained growth in Argentine farm output has not been accompanied by adequate port development. And they say the problem may get worse before it gets better.

The wage tensions that have led to most strikes are not likely to go away anytime soon, considering the approach that President Cristina Fernandez has taken toward Argentine inflation.

With two years to go before the end of her second term, Fernandez says consumer prices are rising at about half the rate estimated by private analysts. The disparity in statistics has been an ongoing source of tension between her government and the International Monetary Fund.

— Nicolas Misculin reports for Reuters from Buenos Aires.

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