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Uruguayan ranchers see opportunity after New Zealand exit

(Bloomberg) – Uruguay, one of the top cattle-exporting countries, has seen an opportunity to increase shipments of dairy cows and breeding heifers to China, as New Zealand exits the cattle trade by sea.

“Although we are much further away and that makes us less competitive, the export of live cattle to China, particularly in the last year, has grown a lot,” said the Minister of Livestock, Agriculture and Fisheries, Carlos María Uriarte, in a interview. “I think we are going to have new opportunities.”

In the last 5 years, Uruguay has sent more than 1.29 million heads, mostly fattened and slaughtered calves in destinations such as Turkey, Iraq and Egypt, according to government data. For ranchers, it is a lucrative side business, but one that is drawing increasing criticism over accusations of cruelty to animals. In April, New Zealand said it would stop exporting livestock by sea within two years of the sinking of a China-bound ship.

“We must take all the necessary precautions and be jealous regarding the welfare of the animals that are in this activity so that these types of accidents do not occur,” said Uriarte, who is also an active rancher.

After reaching a peak of US $ 271 million in 2018, Uruguay’s live cattle exports have cooled off due in part to lower demand from its main buyer, Turkey. In the next two years, Uruguay is likely to send fewer calves, as droughts reduce calvings and ranchers who fatten cattle for the local meat industry fork out for the animals amid a surge in meat exports, he said. Uriarte.

Today, meat packers are doing good business again after the pandemic last year caused export earnings to drop 11%. Beef shipments rose 28% from the previous year to $ 618 million in the four months through April, with China buying $ 341 million, according to data compiled by the government.

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In late 2019, Uruguay’s dependence on China was painful when the bursting of a speculative price bubble led some Chinese meat importers to renegotiate or renegotiate contracts. Months later, the covid-19 caused shipments to the Asian nation to drop precipitously.

The government’s efforts to diversify export markets are slowly paying off, as Saudi Arabia authorized Uruguayan beef and lamb imports last year. Uruguay is trying to open up Southeast Asian markets to its meat, asking the United States for a higher quota last year, Uriarte said.

“It is essential to continue exploring other alternatives so that if what happened to us in 2020 happens to us, we are better prepared,” he said.

Original Note: New Zealand’s Live Cattle Exit Gives Uruguay Ranchers an Opening

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