Argentina, Don't Be Surprised If Your Burgers Taste Brazilian

(Bloomberg) -- The proud beef nation of Argentina may find this tough to swallow: As more of its flavorsome grass-fed cuts are shipped to China, diners at home may increasingly find themselves eating beef products from Brazil.

In San Jorge, a small town in the Argentine province of Santa Fe, a plant now run by Brazilian powerhouse Marfrig Global Foods SA processes 30 trucks, or 750 metric tons, of Brazilian beef each month, churning out hamburgers and sausages for domestic consumption.

Argentina, Don't Be Surprised If Your Burgers Taste Brazilian

That comes as Marfrig, which completed the acquisition of Quickfood SA in Argentina earlier this year, seeks to divert more Argentine beef for export to take advantage of booming Chinese demand and a plunging peso that makes the country’s shipments more competitive.

The gap created by the export push is being filled with cheaper steaks from meatpacking plants that aren’t cleared to ship to China and other major destinations. That’s the case for some of Marfrig’s own plants in Brazil, which are now trucking supplies to San Jorge.

As a result, a third of Quickfood’s popular Paty burgers -- which account for more than half of Argentine retail sales -- are now being made from beef that comes from Marfrig meatpacking plants in Brazil. That portion is set to rise, according to Gustavo Kahl, the unit’s chief executive officer.

“We are adding value to Brazilian beef while getting better prices for Argentina fresh beef,” Kahl said in an interview during a visit to Quickfood’s San Jorge plant this week. The Quickfood buy increased Marfrig’s ability to manage supplies in South America and can yield significantly higher margins, he said.

©2019 Bloomberg L.P.