Cattle Slaughter in Beef Exporter Uruguay to Hit 17-Year Low

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(Bloomberg) — Cattle slaughter in Uruguay, a key producer that’s become known for its traceable grass-fed, hormone-free beef, could fall to the lowest in 17 years amid a shrinking herd and a drop in exports.

That’s according to Eduardo Urgal, director at Ontilcor SA, the country’s No. 6 meatpacking plant by slaughter. Meat plants are suffering a shortfall of cattle as government data shows that ranchers shipped more than 500,000 animals to Middle Eastern abattoirs in recent years, he said. The herd has also shrunk after years of steady slaughter rates to meet China’s insatiable demand for beef.

“With a little luck we’ll slaughter 1.9 million head, which is 15% less than last year,” Urgal said.

That will aggravate overcapacity in an industry that can process about 3 million head a year. Packers need to produce more meat or risk being sidelined in the U.S. and Asia, where some buyers demand volumes that the nation can’t easily provide, Urgal said.

“Uruguay continues to have restrictions in accessing certain clients, above all in the U.S., because it doesn’t have the volume,” he said.

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