Argentina sells DNA as world demands more beef
With affluent consumers from Brazil to China eating more meat, Argentine ranchers are trying to meet global demand for cattle semen and embryos.
Tue, Sep 14, 2010 at 8:16 PM
BEEF IN DEMAND: Exports of bovine semen have increased ten-fold in the last decade, and China's interest in bovine genetics is rousing big hopes among breeders in Argentina. (Photo: Victor R. Caivano/AP)
DUGGAN, Argentina - Tipping the scales at more than a ton, Montecristo would yield a lot of prime Argentine steak. But ranchers are not interested in sending bulls like him to slaughter — his semen is far more valuable.
With newly affluent consumers from Brazil to China eating more meat, Argentine ranchers are honing their centuries-old cattle-breeding traditions to meet growing global demand for semen, embryos and genetics know-how.
"We don't have to pay for advertising, people associate the word Argentina with the word beef," said Mariano Etcheverry, secretary of CABIA, a chamber that groups around 20 Argentine bovine genetics companies.
Aided by the fame of the Argentine steak, breeders say exports to Brazil, Bolivia, Uruguay and Paraguay have surged in recent years as strong economic growth in South America swells the ranks of the middle-class. Some have also found new markets in Colombia and Venezuela.
Exports of bovine semen have increased ten-fold in the last decade, in part thanks to the devaluation of the peso currency after a 2001/02 economic crisis, Etcheverry said.
But it is China's interest in bovine genetics that is rousing big hopes among breeders in Argentina, which already sends most of its soybean exports to the Asian giant.
"China is eager to buy Argentine genetics. It has a huge population and demand for meat is booming there," said Guillermo Garcia, head of Las Lilas Genetica, which lies near the country town of Duggan some 80 miles from Buenos Aires.
Another breeding firm, Don Panos, is also in talks with Chinese investors.
"As well as genetic material, they want the technology — the production technique, so they can do it on their own," the company's head Carlos Marietti said.
Overalls and gloves
At Las Lilas ranch on Argentina's rolling Pampas plains, 65 breeding bulls — called studs — graze in individual pens divided by electric fences to stop them from fighting.
During regular "harvests," workers whisk away the semen of bulls like Montecristo in plastic containers before the animals get the chance to mount the cows paraded before them.
"It's not dangerous. The bulls are used to it," Garcia said as the workers dodge and duck between the hulking animals, wearing overalls and gloves.
Once the semen has passed quality checks, it is diluted to make up to 300 doses that are kept in liquid hydrogen and sold for around $10 each. Garcia said the price can be much higher if the animal has a good breeding record.
"A dose from a Palermo bull can fetch $50," he said, referring to a prize-winner at the country's largest annual farm show, La Rural, a showcase for the industry.
Before deciding what semen to buy, breeders examine details of the bulls' size, weight and estimates of how much feed their calves will need or how tender their meat is likely to be.
Argentine companies still trail their competitors in the United States or Canada in market share, but local breeders say they have carved out a niche among ranchers looking for cattle that yield lean, protein-packed beef on relatively low feed.
Nowhere is the country's ranching past more evident than at La Rural show, where farm hands spend hours preening and pampering cattle in hope of a potentially lucrative rosette.
Hundreds of thousands of visitors mill around the show to gaze at the carefully coiffed cattle. But beyond the tourist spectacle, breeders strike big-money deals and swap expertise.
After paying $15,000 for a prize-winning young bull at the show, Ricardo Smith, who heads the country's biggest bovine genetics firms CIALE, said he had been willing to pay even more — betting on the potential of the unproven stud.
"We're going to use his genes ... but there's always a risk. He could be good like (former Argentine soccer star) Maradona, or a disappointment," Smith told local daily Clarin.
Argentina was the world's No. 4 beef supplier in 2009, shipping 653,000 tons to markets including Russia and the European Union.
But for Asian or African nations aiming to add protein-rich food to their diets, importing Argentine beef is pricey. Buying genetics gives them a chance to boost the quality and quantity of beef produced at home at a fraction of the cost.
"Some countries are interested in bovine genetics because providing affordable foodstuff for their citizens has become a priority," Etcheverry said.
Marietti said his firm is in talks with Ghana and Saudi Arabia, which want "the whole package" — including bull semen, embryos and know-how — as they try to develop a cattle industry based on Argentina's model.
"There's a paradox with some countries that have oil, natural gas ... but not food," he said. "Their goal is to achieve food security."
(Editing by Helen Popper and Kieran Murray)
Copyright 2010 Reuters US Online Report Science News
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