The importance of livestock for the Argentine economy

The importance of livestock for the Argentine economy

The bovine, poultry and pork chains combined generate about 30% of the Gross Production Value of the agri-food chains in Argentina and contribute 23% of their Added Value. Present in the 23 provinces of the country, they employ more than 400 thousand people.

The origin of cattle breeding and the taste for meat consumption of Argentines even predates the establishment of the Argentine State. The first cows descended from the epicenter of the Viceroyalty of Peru to present-day Argentine territory in the mid-16th century. Thus began the expansion of livestock in the wide Pampas plains where, thanks to the abundant pastures in a good climate, the British Angus, Hereford, and Shorthorn breeds would be improved in the 19th century. The first pigs, brought from Europe, arrived at the same time through the Brazilian territory.

The entry of breeding birds to Argentina is much more recent. It was General Urquiza who introduced the first chickens to Entre Ríos in the mid-19th century. From there, poultry farming quickly became an important family activity complementary to the main source of livelihood.

The growth of the cattle ranch in Argentina allowed that, for many years, the consumption of beef was very cheap, thus taking root in the diet of the population. It was the gauchos who, in the break from their daily work, began the ritual of roasting, when they met to cook the meat over the fire and share the food. The great migratory waves that the country subsequently received made the milanesa (breaded beef fillets) the most consumed meat dish today, followed by the steak and the roast strip.

The European settlers who arrived at the beginning of the 20th century also played an important role in the production of pork. This was developed, to a greater extent, in the Argentine core area, in the vicinity of the main urban centers and residence of immigrants, who were the main consumers of this meat. However, pig farming even in this area was generally a secondary activity, until recent times when the scale of farms and specialization have grown remarkably.

In the case of birds, it was not until 1920 that the first visionaries took on a larger scale the activity that until now was carried out by families in patios or small plots. The first undertakings were in the Entre Ríos, Buenos Aires, Santa Fe, and Córdoba provinces, using the new routes offered by the railroad.

The commercial exchange of meat took off in the 18th century. The chopped meat was salted for better conservation and, in addition, the animal’s hides were also used. It was not until the 1880s that the first beef slaughterhouse began to operate, while slaughterhouses with pork products only emerged several decades later.

Impact of meat production on selected variables of the Argentine economy

The Gross Production Value (GVP) of animal husbandry has grown by 15% in the last 15 years, going from AR$ 21.9 billion in 2005 to AR$ 25.2 billion in 2020. The GVP of farming currently represents a quarter of the GVP generated for the item “Agriculture, livestock, hunting and forestry”, which has an incidence of 10% in the GVP of all goods and services produced in Argentina. With this, animal husbandry contributes 3% of Argentine GVP, without taking into account the industrial and commercial activities that derive from breeding and complete the chain.

Recognizing the important impact on regional economies that animal husbandry has in Argentina, it is worth analyzing where the GVP discussed above originates. To do this, the stocks of cattle (except in dairy farms), poultry (except layers), and pigs in each province of the country have been taken into account.

According to data from the latest National Agricultural Census (CNA18), more than half of the head of cattle destined for meat production is found in the Buenos Aires, Santa Fe, and Corrientes provinces territories. If you add to these stocks the rearing of cattle in Córdoba, Entre Ríos, La Pampa, Chaco, San Luis and Formosa provinces, you have 90% of the Argentine cattle.

It is worth noting that bovine breeding is the most atomized of the three analyzed offspring and is carried out in the 23 Argentine provinces. However, the contribution of some of the territories is very small.

In 2018, 94,193 full-cycle agricultural holdings (EAP), breeding, rearing, wintering, and cabins were counted in Argentina. The largest-scale production units are located in Buenos Aires province, with an average of close to 600 heads per EAP. The average size of the herds in Corrientes, Santa Fe, and La Pampa provinces is between 415 and 450 heads. The average number of heads per EAP at the national level is just below this range, standing at 380 heads.

The raising of chickens for the production of meat exhibits a strong geographic concentration that responds to the traditional roots of the activity in Entre Ríos province territory. Sixty-six percent of the heads are located in this coastal province. Furthermore, adding the stocks of Buenos Aires, the two provinces exceed 90% of the poultry for meat production.

As in the bovine case, poultry farming is also practiced in all Argentine provinces, although in this case, the marginal contribution of those with fewer heads is even lower.

There are 58,412 farms dedicated to raising chickens in Argentina. The largest-scale hatcheries are located in the two leading provinces in production: Entre Ríos, with an average of 152,300 heads per unit, and Buenos Aires, with 42,620 heads per establishment. The scale and, consequently, the efficiency, of the EAP in these provinces, is well above the national average, located at 8,450 heads per hatchery.

Finally, pig farming in Córdoba, Buenos Aires and Santa Fe provinces once again concentrates more than 60% of the heads. Adding to this roundup the pig heads in Entre Ríos, Santiago del Estero, San Luis, Chaco, Misiones, Salta and La Pampa provinces reached 90% of the national total.

Pig farming is also practiced in the 23 Argentine provinces, showing strong growth and expansion in recent years.

The establishments dedicated to swine breeding and genetics number 38,907 and house, on average, 92 heads. The largest-scale units are in Santa Fe, with an average of 416 animals per EAP. Also noteworthy is the size of the Córdoba and Entre Ríos farms, which average around 330 animals per unit, while the Buenos Aires developments average just under 300 heads.

Analyzing now the 31 agri-food chains (CAA) outlined by the Ministry of Agriculture, Livestock and Fisheries (MAGyP), it is observed that the bovine, pig and poultry production chains have notable relative importance. For this analysis, in addition to breeding or primary production, industrial, transport, and packaging processes are taken into account.

The bovine, poultry and pig chains combined generate about 30% of the GVP of the CAAs in Argentina, according to data from the MAGyP for the year 2018. Regarding the Added Value (AV) that the goods acquired through their economic transformation, the three chains contribute 23% of the total AV of the agri-food chains.

Said added value is generated at different times in the production chain, which varies according to the production line. In the case of the bovine chain, most of the value is added in the primary stage (56%), while manufacturing transformation also has an important contribution (40%). The value that transportation contributes to this chain is 4%.

In the poultry production chain, meanwhile, more than 80% of AV originates in the primary stage, while manufacturing transformation contributes 18% of the total. The added value of transportation in this chain is very small, barely 1%. Meanwhile, pork production chain is characterized by the intensive added value of the manufacturing activity, which represents 61%. The primary stage of the chain contributes 33% of the AV, while the transfer of products in the different stages contributes 6%.

Of the three CAAs, the pig chain is the one that shows the greatest linkage, with a strong contribution from manufacturing activities in the AV. In the second place, there is the bovine chain and in the third place the poultry chain, where the primary activity maintains a very high relative weight.

As an inherent part of the contribution of the three chains to the dynamism of regional economies and added value to the national product, the generation of employment stands out. Following data from MAGyP, the cattle chain employs 280,000 people. The pig chain, in all its stages, employs more than 100,000 workers and the poultry chain employs 60,000. Together, the three beef, pork and poultry chains employ 440,000 people in Argentina, which is equivalent to 21% of the employment generated by the 31 CAAs. The most labor-intensive meat production is bovine, followed by pork and finally poultry. The latter uses half the labor than the other two since the activity lends itself to the high automation of the processes.

Source: https://bcr.com.ar/

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