06/28/06 Argentina inflation move part II

Argentina Inflation Move II About two months ago, I told you about a beef export ban in Argentina. Well it just didn't last too long. I'm Jeff Keane. I'll be back in one minute with details. Last March Argentina's President, Nestor Kirchner imposed a ban on beef exports in an effort to halt inflation of beef prices beyond the buying power of average Argentines. Other tactics used by President Kirchner included raising taxes, changing production and sales rules, and making the beef industry sign price control accords. The export ban was to last six months but control efforts worked well enough that it will be partially lifted after only 10 weeks. Argentine cattle producers had also staged large protests and threatened a strike to stop selling beef. The ban and combined controls did cause livestock prices to decline by 30 percent, but retail prices in local supermarkets didn't fall that same amount. That seems to be the way it works in the U.S. also  producer prices go up and retail prices follow very quickly although when producer prices go down retail prices stay at the higher level much longer. One part of this article really got my attention. There will be no restrictions on the amount of cooked and preserved meat exporters can ship. Nearly 30 percent of cattle in Argentina is rejected for sale in the local market. This meat is processed and sold for use in soups and other cooked foods to  you guessed it  the United States. Does Country of Origin Labeling ring a bell? I'm Jeff Keane. Western Livestock Reporter, Dow Jones 6/7/06