Argentina Runs Short of Beef as Farm Strike Continues (Update6)
By Bill Faries More Photos/Details
March 27 (Bloomberg) -- Argentines, the world's biggest beef eaters, are being forced to cut back on meat as a standoff between farmers and the government of President Cristina Fernandez de Kirchner enters its third week.
Fernandez, speaking at a rally in Buenos Aires, called on striking farmers to end road blocks as a condition to starting talks with the government. Agricultural leaders expressed mixed reactions to the speech. Some Buenos Aires residents banged pots and pans in the streets for a third night in protest.
``You can't negotiate with a gun to your head,'' Fernandez said to a cheering throng gathered in Buenos Aires, flanked by her cabinet and her husband, former President Nestor Kirchner. ``Lift the strike and then let's talk.''
The 15-day day strike is the biggest conflict Fernandez has confronted in the three months since she succeeded her husband. Road blocks by farmers opposed to rising export taxes have led to shortages of beef, poultry and other meat in restaurants and supermarkets across the country.
``We're out of our prime cuts and we don't know when we'll get more,'' said Roberto Di Bella, 66, the delivery manager at El Desnivel, a steakhouse in the San Telmo neighborhood of Buenos Aires.
Hugo Biolcati, vice president of the Argentine Rural Society, said in an interview on the Todo Noticias television channel that Fernandez's speech was a ``call for conciliation.''
At a road blockade near the city of Gualeguaychu in Entre Rios province, farm leader Alfredo de Angelis said the speech was ``full of hate'' and vowed that the strike would continue.
`Ungovernable'
``Nestor and Cristina are making Argentina ungovernable,'' opposition leader Elisa Carrio said during an interview with Todo Noticias television last night. ``Argentina can live a few weeks with less meat and milk, but what we can't live with is indignity.''
Farmers, whose roadblocks are preventing trucks from entering ports and warehouses, want the government to roll back export taxes on soybeans and sunflower seeds that were raised to 44 percent from 35 percent on March 11.
This morning, housewife Rosa Avalos pushed her cart past empty shelves in a supermarket in the capital's Palermo neighborhood. A sign hanging in the beef section apologized to customers for the lack of meat, saying ``we hope this situation will be resolved soon.''
Beef Eaters
Argentines eat 66 kilograms (146 pounds) of beef a year, according to the Argentine Agriculture Secretariat.
``This is bad for Argentina,'' Avalos, 50, said. ``Both sides should go to the negotiating table.''
Argentina, the world's second-largest corn exporter and the third-largest soybean exporter, has relied on rising agricultural revenue to help maintain a budget surplus as spending surged. Fernandez said March 25 that she won't ``be subject to extortion'' and that export taxes subsidize roads and diesel fuel that farmers need to get their goods to market.
Argentine ports have depleted their grain stocks, said Ricardo Baccarin, a trader for brokerage Panagricola SAFICI in Buenos Aires.
White Plains, New York-based Bunge Ltd., the world's biggest oilseed processor, said yesterday that it canceled some sales from Argentina.
March shipments of soybean oil to South Korea have been delayed by at least a month, officials at two Korean buyers said.
Citibank analyst Marcos Buscaglia wrote in a report today that the risk of capital outflows from Argentina are rising and that a stronger-than-expected depreciation of the peso this year is more likely. Citibank forecasts the exchange rate to be 3.33 pesos per dollar by year-end, from 3.1645 pesos today.
The yield premium investors demand to own Argentine bonds over Treasuries narrowed 1 basis points to 5.50 percentage points, according to JPMorgan Chase & Co.'s EMBI Plus index. A basis point equals 0.01 percentage point.
