Traveling in South America: South Dakotans intrigued by beef feedlots, Liniers Auction

Farm Forum

With a number of beef producers on our trip, learning about how cattle are raised and marketed was an important part of our travel through Argentina. We were able to visit with owners of a feedlot as well as guides at the Liniers Livestock Market in Buenos Aires to answer many questions about the beef industry in this country.

Prior to the 1990s cattle in Argentina grazed on pastures throughout the country. Now a majority of the cattle are fed in feedlots with a mixture of corn and some milo. Feedlots were chosen for feeding because the land is very fertile, resulting in higher profits when row crops are grown.

Today 50% of the beef raised are finished in feedlots in Argentina. The cattle in Argentina are considered finished at an average weight of 450 lbs. for calves going to feedlots. This compares to 700 to 800 lbs. in the U.S. Argentineans demand the smaller animals because they feel the smaller animals result in beef that is tender. Growers respond to the demand by raising the animals according to the wishes of the consumer. When one of the ranchers told the Argentinians how big calves in South Dakota are when they come off pasture, he said, “My gosh, those are ox, not calves.”

Our group visited Pavon Arriba Cereales SA which is primarily a beef feedlot with a grain storage site in the nearby town of Pavon Arriba in the Santé Fe province. The company is owned by three partners. The feedlot started in 1999 with 3,000 head and expanded in 2005 to a maximum capacity of 8,500 head. The grain storage site originated in 1988. PACSA also serves as a transport company moving grain to terminals for export. Farmers from many of the surrounding communities store their grain at the PACSA grain storage facility and use the transportation services.

The company hosts tours of their operation to further the community’s understanding of agriculture and how it is beneficial to the area. PACSA says it works to offset environmental concerns related to water purity, manure and pest management and minimizing odors. At the feedlot, our group noticed few flies buzzing around and minimal odor. Beef producers in our group were impressed with the facilities.

Of Argentina’s total beef exports, roughly half are boneless chilled cuts, with the European Union and Chile as almost exclusive destinations. The EU receives a significant volume of the beef and the highest value as most exports are premium cuts under the Hilton Quota. Chilled rump and loin are the typical cuts exported, Germany being the main buyer, followed by the Netherlands. The January price for Hilton Quota is roughly US$15,000 per ton. The Hilton Quota is the informal name of the Tariff Quota regulated by the Commission Regulation (EC) No 936/97 of 27 May 1997 for the European Union.

Argentine beef production for 2014 is projected at 2.84 million tons. The Hilton Quota beef enjoys a duty preference through the European Union Most Favored Nation import regime.

Once the cattle are at market weight, many are shipped to Liniers Livestock Auction in Buenos Aires.

Outside Liniers Market is a monument to a gaucho, only one of dozens in the city which pays tribute to a worker. As we walked through the gate, we noticed that, despite thousands of cattle, we didn’t hear much bellering from the animals. Our guide said that is because gauchos work the animals while riding on horses. The facility is the source of employment for 2,500 families.

Located in the middle of Buenos Aires, the Liniers Livestock Market sells about 10,000 cattle a day. Catwalks are the easiest way to see the 84 acres of the facility. A bell ringing for about five minutes signals the start of an auction. Only animals for slaughter are sold at Liniers. The auctioneer and the buyers move from pen to pen as the live action takes place.

Each pen takes no longer than 20-30 seconds to sell, and then the group moves on to the next pen. There are 55 auctioneers and 550 buyers at Liniers. The facility has 2,200 pens and 140,000 animals are sold each month. Cattle are trucked to Liniers from up to 125 miles away.

All cattle must be sold no later than the day after they arrive and on Fridays all stock must be sold because there’s no market on the weekends. Local grocery stores as well as slaughterhouses purchase the beef.

As each day’s auction ends, the facilities are cleaned of manure and then the pens are power washed. Our guide said that Liners wants to be a good neighbor as houses and businesses have built around the market.

Of the total country’s slaughter, roughly 5 million head are finished on feedlots, another 5 million head are finished on pastures with supplementation of silage, grain and bales, and the balance is primarily cattle owned by small producers which are typically finished on grass and eventually some additional feed.

The U.S. market for Argentine fresh beef has been closed since 2001 when Argentina had a widespread foot-and-mouth disease (FMD) outbreak. In 2007, the OIE declared Argentina as free of FMD with vaccination.

In 2005, the Argentine Government began to intervene in the local cattle/beef market, which at the time, accounted for 10 percent of the world’s beef exports, but dropped to only 2 percent in 2013. Argentine beef exports are taxed 15 percent.

An alternative to beef

In a land of cattle, sheepmeat has always had low priority in Argentina itself, where less than 3 lbs. per capita is consumed. An operation that focuses on alternatives, La Constancia is a 172-acre farm owned by the Italian Gallo family. Robert Gallo told us they raise the Hampshire Down breed because it is a tradition in the family. As far as the market, there is more demand for meat goats. Over time this farm has had to become more diversified in order to create additional income streams due to the challenges of the smaller farm size. Along with the sheep, La Constancia also has goats, chickens, corn, soybeans, wheat and hosts group events such as weddings, meetings, birthday parties, and foreigners like SDARL. Our group enjoyed the gracious hospitality of the people of Argentina. Lamb roasted outside was enjoyed by our group as we dined at tables set outside in their beautiful surroundings.