Argentina now represents less than 1 percent of JBS’ total revenue. In the fourth quarter of 2011 the JBS division that includes Brazil and Argentina saw its earnings before interest, taxes, depreciation and amortization fall 10 percent from a year earlier to $223 million.

Batista said JBS closed meat and leather plants in Brazil, Argentina, Uruguay and Paraguay during the second half of 2011 in a bid to gain efficiency in the future.

But for JBS Argentina is particularly challenging because of lingering government restrictions on beef exports, interference in domestic beef prices and large salary increases associated with skyrocketing inflation.

Even shutting down has costs, given severance payments required to workers at closed plants. “It’s not easy to close plants in Argentina but we’ve gone from six to one there,” Batista said. “If anyone in Argentina wants to help the system become easier to operate in, that would be very welcome.”

Argentina’s broader beef sector suffered last year from a 9 percent drop in the number of animals slaughtered nationwide, as ranchers rebuilt cattle herds decimated by a 2009 drought.

“It’s a country that obviously has a lot of potential in agriculture and livestock, and it has a name in the beef business in the whole world,” he said. “But there’s one thing: We’re not going to let ourselves lose money there any longer.”

Australia
A cattle producer from the southwest portion of Western Australia has been fined for not entering details of cattle he purchased into the National Livestock Identification System.

The man was convicted this month of two offences in 2010 and 2011 and charged a total of almost $1,500 AU. The maximum fine for such an offence is $5,000.

Livestock industries senior veterinary officer Bob Vassallo says there are very important reasons for farmers to record the movement of livestock in the system.

“It’s basically intended to be able to trace animals in the event of a disease outbreak and also in situations where there may have been some contamination or potential contamination of animals with chemicals of various sorts.”

Brazil
The Brazilian Ministry of Agriculture (MAPA) has signed an agreement with eight states in the country’s northeast to join the official foot-and-mouth disease- (FMD) free zone.

The deal was signed by members of Brazil’s Ministry of Agriculture and by secretaries for the states of Alagoas, Ceará, Maranhão, Paraíba, Pará, Pernambuco, Piaui and Rio Grande do Norte.

The main goal of the project is to enable the region to be nationally recognized as an FMD-free zone with vaccination this year.

“We need to make sure that there is no virus circulation in the region and that states have a minimum structure to maintain the status achieved,” said Guilherme Marques, director of the Department of Animal Health. “We want to pass the block as a whole so that we can make a single entry for the entire region with the World Organization for Animal Health.”

Brazil’s federal government has already gotten $54.56 million to help the states achieve FMD-free recognition. The states of Bahia and Sergipe have already been declared free from FMD, as has North Central Pará.

European Union
Cattle prices within the E.U. surged to record-high levels this spring, despite a slow start to the year as concerns about the tightness of forward cattle supplies and falling herd numbers continue to influence the market.

The recent strength in cattle prices across the E.U. is closely linked to falling production levels, with cattle numbers down across the majority of large beef-producing nations.

Cattle slaughter throughout Great Britain, Northern Ireland and the Irish Republic so far in 2012 is well back year-on-year, indicative of the tight supply of slaughter-ready cattle.

France was the largest beef producer, at 1.56 million metric tons (MT), or 20 percent of total production, followed by Germany (1.16 million MT) and Italy (1.09 MT). The U.K. was the fourth-largest producer of beef in the E.U. in 2011, producing 936,000 MT, or 12 percent of total E.U. production.

Venezuela
Venezuelan president Hugo Chavez has ordered the immediate nationalization of the British agricultural company Agroflora – a subsidiary of Britain’s Vestey Group, which focuses on the commercial production of beef.

The Venezuelan president announced that the company’s nearly 500,000 acres of land would be expropriated and brought under direct “operational and administrative control” of the state through the country’s Food Security and Sovereignty Law.

This legislation allows the government to forcefully expropriate land under issues of national food security and the public good.

“This is social property,” said Chavez. “It cannot be converted, as they have done, into property for just a few people, so they can enrich themselves while polluting waterways and rivers.”

The Venezuelan president added that the move to nationalize the business comes after a breakdown in compensation negotiations between the state and the Vestey Group, due to the English company’s demands that reparations for the land be paid in U.S. dollars.

Chavez stressed that the company would still receive compensation from the government in Venezuela’s national currency.

But the Ranchers Federation of Venezuela has criticized the decision as a “new attack against production and property” in Venezuela and stated that the British business had tried to maintain “friendly relations” with the government.

Classified as highly fertile type “A1 lands,” the government states the land used by Vestey for cattle grazing is most appropriate for the cultivation of basic food staples, such as coffee and vegetables.

“Extensive cattle farming of cows and buffaloes should be done on a different kind of land where the animals can feed on quality pastures,” commented Braulio Alvarez, representative in the National Assembly and former leader of the Zamora Peasant Front, a political organization supported by the Chavez regime. 

Clint Peck is the owner of Global Beef Systems, LLC.