COWS, sheep, pigs and llamas are the stars of ExpoRural, Argentina’s biggest agricultural show, which took place on July 18th-29th. They made a racket in their stalls at a Buenos Aires showground as their owners brushed and vacuumed them to prepare for a barnyard-themed beauty contest. Outside, spectators filled a grandstand to watch Hereford bulls parade before a judge, the beasts’ hooves sinking into the mud. Nearby, Toyota, Ford and other manufacturers showed off new 4×4 pickup trucks. House-sized combine harvesters loomed over the crowd.
Argentina’s economy is in a slump and inflation is at 30% but ranchers are cheerful. After a decade of decline, beef exports began recovering in 2015. Last year Argentina re-entered the list of the world’s top ten beef exporters. Foreign sales surged by 60% in the first half of this year. That is because Mauricio Macri, Argentina’s president since 2015, has ended the populist policies of his predecessors, which ground ranchers into mince.
In 2005 Argentina’s then-president, Néstor Kirchner, imposed a 15% tax on beef exports in an effort to hold down inflation, which was around 12%, and to please voters. Each Argentine eats 59kg (129lb) of beef a year; only Uruguayans consume more. When the levy failed to control prices, Kirchner, who died in 2010, banned exports for 180 days. That worked, briefly. Between 2007 and 2011 ranchers sent more than 12m cows, a fifth of the herd, to the slaughterhouse, creating a glut. But then they stopped breeding cattle, or switched to smaller breeds that required less feed and produced less meat. Prices jumped.
Both producers and consumers suffered. Exports plunged, from 771,000 tonnes in 2005 to 199,000 tonnes in 2015. More than 15,000 farm workers lost their jobs. Some ranchers switched to soyabeans (growing them, not eating tofu themselves); others moved to neighbouring Uruguay. Foreign leather firms, such as Italy’s Italcuer, left the country. The third-largest exporter of beef in 2005, Argentina fell to number 11 by 2013, during the presidency of Kirchner’s widow, Cristina Fernández de Kirchner. Even tiny Uruguay and Paraguay sold more.
Mr Macri is now repairing the damage. In his first week in office, in December 2015, he scrapped the export tax and floated the peso, making exports more competitive. He has opened new markets. In January this year China agreed to buy chilled Argentine beef for the first time. On July 23rd Mr Macri boasted in a tweet that the first shipment of Patagonian beef had left Argentina for Japan under an agreement reached in May. Argentina is on course to export 450,000 tonnes of beef this year, up from 312,000 in 2017.
“We are still very far from capacity,” says Ulises Forte, head of Argentina’s Beef Promotion Institute. Ranchers are rebuilding their herds. That takes time. With interest rates at 40%, borrowing to expand is expensive. Even so, ranchers are bullish. “The situation is improving day by day,” says Mr Forte. Mr Macri, who is expected to run for re-election next year, hopes for a political payoff. “For every 100,000 tonnes more we export, we create 10,000 jobs,” he says. To secure victory, he will have to spread the ranchers’ good cheer to Argentines with other beefs.