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A Market for Beef Ambles Across a Border.

A Market for Beef Ambles Across a Border.

For decades, the cattle-raising family of Gabriel Pintos looked across the Río de la Plata with respect and envy at Argentina’s legendary tradition for producing beef.

But scanning the vast expanse of his 193-acre ranch here recently, where ducks quacked in a nearby pond while 120 cows nibbled on green grass, Mr. Pintos exuded a new competitive vigor.

“Uruguay today has the maturity to compete with any part of the world with its beef,” said the tanned and fast-talking Mr. Pintos, 51. “This is a historic opportunity for us.”

For more than a century, Argentina has distinguished its beef as healthier and more natural than meat from most of the world. Cows ambled leisurely across the rich soil of the Humid Pampa munching on green grass, not the grains offered in crowded feedlots in the faster-paced American industry.

But that image could become a memory from a bygone era. Political decisions by Argentina are changing the taste of the famed Argentine steak and threatening to tarnish the country’s world-renowned beef industry.

The changes have driven away investors, reduced the size of Argentina’s herd and given the nation’s smaller neighbor, Uruguay, the chance to capitalize on Argentina’s troubles by billing itself as the “last big farm” for healthier, grass-fed cattle.

Argentina, in some ways, is a victim of its own success. Exports rose after a steep devaluation of the Argentine peso in 2002 made the country’s beef more competitive globally. But supplies began to dry up for Argentine consumers — who eat more beef per person than any others in the world, industry officials say — causing prices to rise and stoking social discontent.

So Néstor Kirchner, Argentina’s president at the time, responded with a 180-day ban on exports to tamp down prices in 2006. Later, he put in price controls on certain popular cuts, like roast beef, which in turn led Argentines to eat still more beef.

But faced with a prolonged drought this year and concerns over their profits, many ranchers are converting their pastures into land for soybean cultivation. Now government incentives to fatten cattle faster are deepening a shift toward raising more Argentine beef with grains like corn and oats in often-crowded feedlots, opening the door for Uruguay to claim the grass-fed advantage.

The Spanish introduced cattle to Uruguay more than 400 years ago, and beef has long been its most important export industry. Cows outnumber people more than three to one in this country of 3.4 million, where about 80 percent of the land is used for cattle grazing.

The nation is sandwiched between Brazil, the world’s largest beef exporter, and Argentina, which has a cattle herd some five times larger than Uruguay’s. Cattle in Argentina and Uruguay were always relatively similar — both were grass-fed and free-range, and they share similar British genetics. As in Argentina, mustachioed gauchos roam the plains with black berets pulled tight over windswept faces.

Despite its neighbor’s problems, Uruguay has struggled to compete with Argentina’s global reputation.

Alejandro Berrutti, a beef trader in Montevideo, recalled his frustrating efforts to introduce Uruguayan meat into the market in Denmark this year. At a Copenhagen supermarket, Argentine beef was classified as the best in the world, but workers had never heard of the Uruguayan equivalent, he said. At a restaurant, the main entrees were Danish salmon and “Argentine steak.” Mr. Berrutti asked a waiter if there were any other dishes.

“Sir, this is the menu that we have had for 25 years, and it works,” Mr. Berrutti recalled the waiter replying.

At Uruguay’s National Meat Institute, which promotes the beef industry, Silvana Bonsignore, the director of marketing, cited a 2004 study of four cities — Atlanta, Boston, Denver and Washington — showing that many Americans knew very little about Uruguay the country, let alone its reputation for beef.

“It is very difficult to sell Uruguayan beef when nobody is familiar with Uruguay,” she said.

With that in mind, Ms. Bonsignore and her staff came up with a new marketing campaign in 2005 seeking to sell Uruguay — its wines, its beaches in trendy Punta del Este — while promoting its beef. Glossy brochures juxtapose images of grazing cattle and plates of beef dishes, with scenes of Uruguayan vineyards and seaside boardwalks.

Ms. Bonsignore has held beef-sampling events in Spain and Portugal, showcasing Uruguayan chefs. In April of 2008, the meat institute organized the “world’s largest barbecue,” nearly 5,000 feet of grills and 26,000 pounds of beef, earning Uruguay a Guinness World Record.

Uruguay is trying to show the world it is dedicated to “natural” beef — grass-fed and hormone-free by law. One marketing campaign features a symbol of a supermarket bar code emerging from blades of grass. Another notes that each Uruguayan cow, on average, grazes on pasture the size of two soccer fields.

At the same time, big beef investors have begun betting on Uruguay’s more market-friendly policies. Terry Johnson, owner of BPU Meat, is investing $150 million in Uruguay, including in a plant scheduled to open in January that will be able to process 1,500 cattle in one eight-hour shift. Mr. Johnson, a Briton, sold plants in Argentina and Brazil in 2006 to focus on Uruguay.

“For whatever reason, the Argentine government has tried to bring the agribusiness to its knees,” Mr. Johnson said. “The herd is shrinking, land prices have become cheaper. Anybody with anything to do with cattle wants to come out. Uruguay offers a chance to do things right.”

On his ranch, where he also raises horses and lamb, Mr. Pintos, a veterinarian by training, said he is looking for ways to increase production while maintaining Uruguay’s grass-fed edge.

He comes from a family of farmers, and his wife from a line of cattle ranchers. Now they are teaching the business to their children, and they sent their oldest son to New Zealand for six months to learn about the industry there.

“The Dutch are investing a lot here, the Argentines, the French, the Brazilians,” he said excitedly. “I am a humble worker that wants to keep getting better day by day, not just for me or for my family, but for my country.”

Charles Newbery contributed reporting from Buenos Aires.

Source: The New York Times - Alexei Barrionuevo


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