Famous for its gaucho cattle farmers and love of steaks, Argentina’s appetite for beef is struggling to withstand a jump in prices that has left many cuts 50 per cent higher already this year.
In place of mollejas, a veal sweetbread that is a classic of his country’s cuisine, Buenos Aires restaurateur Julián Díaz has started putting other items on the menu. “We’ve turned to lamb and more fish dishes,” said the owner of Los Galgos.
Throughout Latin America, many culinary favourites like the Argentine asado barbecue are becoming ever more expensive, as war in Ukraine and global supply chain bottlenecks have a knock-on effect on commodities from fuel to fertilisers.
Pensioner Maria Flier said that almost all of her savings now go to groceries. “We used to eat beef all the time, now maybe twice a week at best,” she said at a weekly street market in Argentina’s capital.
Although higher inflation is a worldwide phenomenon, for many of the continent’s most disadvantaged even basic foodstuffs have become harder to afford, sparking warnings of nutritional insecurity.
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Hunger in Latin America and the Caribbean (LAC) reached its highest point since the turn of this century, after a 30 per cent increase in the number of people experiencing it between 2019-20, according to a United Nations report in November.
Julio Berdegué, representative for LAC at the UN’s Food and Agriculture Organization, said the region had been “going backwards” on food security.
About 5 per cent of its population was undernourished in 2014, according to Berdegué, rising to 7.1 per cent in 2017. Due to the Covid-19 pandemic, in 2020 the proportion climbed to 9.1 per cent, almost 60mn people. Fourteen countries in the region have annual food inflation rates above 10 per cent, he added.
“It’s been decades since we have seen this, and the combination of both trends is horrific in terms of the human suffering that it is causing,” said Berdegué.
While all Latin American economies are self-sufficient in food, according to the consultancy Oxford Economics, even net exporters face inflationary pressures for produce where prices are set internationally, such as grains.
The issue is likely to figure in many voters’ minds in presidential elections in Brazil and Colombia, where a former Marxist guerrilla will stand against a populist businessman in a second-round tiebreaker this month.
On a recent morning before the first-round ballot in Paloquemao, the largest fruit and vegetable market in Bogotá, punters and vendors alike complained about a range of staples. A standout is potatoes, which have soared in price by three-quarters in 2022. Part of that has been blamed on rising fertiliser prices, as well as protests in Colombia last year that disrupted planting season.
Angelica Neira, 30, who runs a vegetable stall with her husband, said that a variety called criollas had doubled to 6,000 pesos ($1.60) a kilo. The small yellow Andean potatoes are used in a traditional Bogotá dish called Ajiaco — a hearty chicken, potato and sweetcorn soup served with capers and avocado.
“Tomatoes have also doubled in price,” she added. “Most things have gone up 100 per cent since the start of the year and if not doubled then they’ve gone up maybe 40 or 50 per cent”.
Another stall worker, 25 year-old Gerson Ubaque, urged the next government to intervene. “Colombia is a very rich country geographically, because we’re on the equator and we have so many different altitudes. You can grow anything here,” he said.
“But rural Colombia needs help — a bit like in Ecuador, where they subsidise agriculture. Here there aren’t any subsidies.”
That sentiment will be tested in the run-off between millionaire Rodolfo Hernández and the leftwing former guerrilla Gustavo Petro, who has proposed an agricultural revolution that will turn Colombia into “a pantry for the world”.
“Most of our population earns less than 3,000 pesos a day and a litre of milk costs 3,000, and a kilo of meat costs 38,000, so how can people eat?” Petro asked after winning the first-round vote.
While some governments have intervened to ease the burden on those struggling the most, mainstream economists argue those policies could backfire. They warn that a splurge of government spending risks damaging the public finances, which in turn could weigh on the exchange rate and add to inflationary forces.
Despite high taxes on exports and strict currency and price controls in Argentina, inflation there is approaching 65 per cent, its fastest pace in 30 years. Since October last year the government has frozen prices of over 1,000 household goods in a bid to curb price rises.
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The squeeze on household budgets is poised to be a major theme when Brazil, an agricultural powerhouse, chooses a new president in October.
Giovanni Carneiro de Oliveira, who runs two restaurants in central São Paulo, said he had never seen such high price increases for provisions since becoming the owner in 1999. The national dish of feijoada — a bean stew with beef and pork — has not escaped.
“The feijoada has become more expensive mostly due to its main ingredient, beans,” he explained. Collard greens, served as an accompaniment, have also climbed from R$30 to R$100 a box.
Seasonal factors such as higher temperatures until April and heavy rainfall that has damaged supply are in part to blame for elevated vegetable prices in Brazil, said André Braz, economist at the Fundação Getulio Vargas.
While a more favourable climate in winter should help somewhat reverse the situation, he added: “There is another, more permanent effect, which is the increase in production costs: manures, fertilisers, pesticides and also diesel.”
Former leftist president Luiz Inácio Lula da Silva is attempting to seize on that discontent to defeat incumbent Jair Bolsonaro, evoking nostalgia for life during his two terms from 2003 until 2010, when living standards rose as Brazil rode the global commodities boom and funded anti-poverty programmes.
Elsewhere in the region, politicians are trying other measures. Mexico’s administration last month announced a plan to try to boost the production of staples like corn, rice and beans.
Even though the cost of a kilogramme of tortillas — from which many Mexicans get a big chunk of their daily calories — rose by almost one-fifth in the past year, lower prices for beans and rice should help ease the burden on the poorest, according to the head of the country’s anti-poverty agency, José Nabor Cruz.
Carlos Vegh, a professor of economics at Johns Hopkins University, pointed out that growth forecasts for the wider region had been lowered in the wake of the Ukraine invasion, and central banks across Latin America are raising interest rates aggressively in an attempt to temper price rises.
“Fiscal resources are rather depleted due to the social needs triggered by the pandemic, which does not augur well for help to the poorest in dealing with food price inflation,” he said.
Lucinda Elliott in Buenos Aires, Gideon Long in Bogotá, Carolina Ingizza and Michael Pooler in São Paulo and Christine Murray in Mexico City
Source: Economy - ft.com
