It's in Argentina. And it's staying there.
Citing rising domestic food prices, economically illiterate President Nestor Kirchner has chosen to destroy his country's most productive industry, slapping a 180-day moratorium on beef exports. Though, yes, it clearly would have the desired short-term effect of flooding the domestic market with excess beef, what happens once the current generation of cattle are slaughtered and it's no longer profitable for ranchers to rear the same number in the next generation?
Most puzzling, this asinine policy comes just as the commodity price of beef and futures contracts are beginning to soar, as the avian flu outbreak has rendered beef much more competitive as a substitute for poultry. Argentinians can thank their leader for ceding that enormous worldwide market to Brazil and Australia.
Beef futures prices didn't decrease this week even though:
1) Japan will continue to ban US Beef for the foreseeable future (I like Secretary of Agriculture Mike Johanns)
2) Hong Kong stopped the importation of US Beef this week because a bone shard was found in a shipment
3) The big one that the MSM missed--a ten year old cow was found in Alabama, which tested positively for BSE
In other Agricultural news from South America, Argentina and Brazil look to have healthy Soybean crops this year. The past couple of years have been a bust for Soy in South America, which caused a spike in US Soybean prices in 2004. Hog futures have held steadily above $60 for four years now. Finally, if anyone has insight into the technical pattern of Petroleum Futures, please help me figure this out.
Posted by: nalgene | March 17, 2006 at 05:04 PM