It was gorgeous and sunny Monday morning in Buenos Aires when the 2008 Beef Study Tour of South America pulled into the circular driveway of Liniers Market, the major livestock trade center of Argentina. Founded in 1901, about 20% of all cattle marketed in Argentina pass through this sprawling facility, which claims to be the largest in the world and is located just 45 minutes from the heart of downtown Buenos Aires.
With a trade area ranging as far as 2,000 km, (125 miles) only cattle have been traded at the sprawling facility over the past 15 years, Emiliano Amigo, director of administration and production, told the group of 34 travelers. The tour group was one of five that Liniers would host that day. Interestingly, during our visit we encountered another tour group -- and some familiar faces -- from Kentucky.
Amigo escorted us over the catwalks, pointing out the scattered pens of cattle. Down below, workers on foot were quietly moving cattle using sticks with plastic bags tied on their ends. There was no sign of electric prods.
While the facility sells 40,000-50,000 head of cattle weekly (heaviest sale days are Tuesday, Wednesday and Friday), only 1,700 head were traded that Monday morning. That's the result of a traditionally slow market day but also the fact more cattle are bypassing public auction markets in favor of selling direct to circumvent the price controls enacted by the Argentine government.
The Argentine government has limited exports of Argentine beef to 50,000 tons/month, a move intended to flood the domestic market and hold down domestic beef prices for Argentine consumers. A staple of diet and social life in Argentina, beef accounts for 5% of the average Argentine's total disposable income, and per-capita consumption of beef is about 150 lbs. In addition, the government has enacted price controls on live cattle and the 12 most popular cuts of beef, a policy that will be in effect until at least March.
Most cattle arrive at the facility the day before sale. Brands are required, and the cattle are weighed upon arrival and identified by owner, source, number and sex. Cattle eligible for export must carry an official, lifetime tag. There is no use of electronic ID in the Liniers facility, though Amigo says some large estancias do utilize the technology. Health inspections conducted by government-affiliated health officials occur at both the auction market and slaughter facilities.
All cattle are weighed at entry into the facility, with an official payweight taken after the sale has been gaveled. There are 52 consigners, or commissions, in this facility. Much like a stock exchange, these members buy a seat and the right to buy and sell cattle for their clients. Any producer can market cattle at the facility but must do so by calling ahead to consign with a commission member.
The buyers walk from pen to pen with the auctioneer. When the auctioneer reaches the high bid, he slaps his stick on the rail and the group moves to the next pen. A runner reports the information by phone to the central office, and the info is entered into the facility's main computers.
The few cattle up for sale on this particular day were a diverse mix of cattle ranging from nice, moderately-finished English crosses, mostly black, and some purebred Angus, to bony rough-looking cows. Amigo told the group that Angus/Hereford crosses are highly coveted by buyers, and purebred Angus or Hereford typically go for export.
All cattle are sold for slaughter. The sold cattle are moved by truck 20-40 miles to slaughter plants.
Some commission companies represent the sellers; some represent the packers. The seller pays a 3% commission to market his cattle. The auction company represents the farmer. If the buyer doesn't pay, the auction company has to.
When the cattle leave the farm they must travel with two certificates. One is for health, and the other is for taxes and brand certification. A computer keeps track of the cattle from arrival through departure.
Once the cattle are auctioned, mounted gauchos (cowboys) move the cattle on to the scales for final payment weight. The Liniers facility maintains a cavvy of 350 horses, a cross between Spanish Creole and Arabian blood.
Though this market seems very large, Liniers handles only 20% of Argentina's daily cattle sales; the other 80% sell via local auctions or directly from rancher to packer. Only a small amount are slaughtered by the farmer.
Designed to provide participants with a first-hand, in-depth look at the makeup and competitive positions of the Brazil and Argentina beef cattle industries, the group spent five days in Argentina and five days in Brazil. During that time, we met with beef producers, researchers and government officials from both countries, as well as toured cow-calf, stocker, feedlot and processing operations. Also on the agenda was visiting some of South America's most stunning tourist destinations.
Coming up next week is a report on the group's visit to Cactus Argentina.
Who's traveling in South America? The travelers include: Sara Hunter of Iowa; Walter Major of Kentucky; Jim Almond, Page Anderson, Julie Burke, Jim and June Dahle, Marty Ann Earnheart, Elner and Linda Eaton, Bob and Helen Hanson, Larry Holzworth, Fred Horpestad, Tom Hougen, Alan Johnstone, Bob Sitz, Tim Skinner, Walter and Lila Taylor and Ted Williams, all of Montana; Jim Buell and Eloise McQueary of Nevada; Bill Bertram, Dennis Brown and Edwin Pearson of North Dakota; Robert and Linda Gray of Oklahoma; Alan and Ginger Withers of Oregon; and Robert and Ruth Rose of Washington. Acting as guides are Clint Peck, Montana director of Beef Quality Assurance, and Joe Roybal, editor of BEEF magazine.