When you think of a beef export power, countries like Argentina, Australia or Brazil come to mind. Not Paraguay necessarily. In fact, very few know that in 2015, Paraguay exported $420 million more meat than Argentina, for a total of $1.3 billion, slightly below Uruguay and its total of $1.6 billion, (source: IDB’s INTrade portal).
Today, it is more common for a Russian to eat Paraguayan meat than an American or a Spaniard. Russia is the second largest export market for Paraguayan meat, at $280 million in 2016, according to the Servicio Nacional de Calidad y Salud Animal (SENACSA). Russia imports beef mainly for the production of hamburgers, sausages and other food products.
Since 2015, Qatar Airways flights offer Paraguayan meat to its passengers. It is estimated that 170,000 pounds of beef tenderloin have been shipped —which can be portioned to feed approximately 400,000 travelers. Not only have meat products flown high, so to speak, so have the cows and the bulls. In 2016, Paraguay exported eight planeloads to Ecuador —1,900 premium cows and 50 breeding bulls— with the goal of improving the genetic quality of the Ecuador’s cattle stock and expanding the country’s export market.
Paraguay’s success in meat exports is the result of an effective public-private partnership that began in 2005 between businessmen, government, the Rural Association of Paraguay, meat exporters, universities and scientists who came together to improve product quality and overcome barriers, especially sanitary standards, that limited Paraguay’s export performance in international markets.
The alliance is set to fly even higher with the creation of the Investment and Export Network (Red de Inversiones y Exportaciones, (REDIEX) in the Ministry of Industry and Commerce and the launch of the Meat and Leather Board (Mesa Sectorial de Carne y Cuero), chaired by a representative of the private sector. Since 2007, the IDB has supported the government’s export efforts with a $20 million financing for REDIEX and, in December 2016, the IDB approved another $10 million to assist the business development of exporting companies.
Two prominent leaders in the sector, José Luis Laneri, Manager of the Meat and Leather Board, and Korni Pauls, President of the Paraguayan Meat Council, attribute the country’s success to the following:
- Improvement of agricultural health. Government, producers and academia worked together to eradicate outbreaks of foot-and-mouth disease and mad cow disease, as well as vaccine production and removal of a variety of pests. With vaccination since 2011, Paraguay is a country free of foot-and-mouth disease and one that shares the same sanitary status as Argentina, Brazil and Uruguay.
- Increased quality and productivity. A few years ago, cattle required between 30 and 35 months for breeding and fattening. Scientists, academics and producers focused on improving genetics, upgrading the feeding system with new varieties of grass and animal management. Today, cattle requires only 20 to 24 months before it is ready to be transported to the slaughterhouse.
- Certifications and traceability of livestock. The livestock sector has been able to certify hundreds of thousands of heads of cattle that are 100% organic. This certificate is required by the European market and is a hallmark of quality that opens the door to new markets. Paraguay also has a group tracking system that registers sanitary controls (shots), transfers and changes of livestock owners, and is making important advances in individual tracking to record all events of the animal, from birth to slaughter.
- Better infrastructure and control of livestock transport from the field to the slaughterhouses. This includes improvements to slaughterhouse facilities and equipment and meat processing techniques including slaughtering, cutting, and aspects of storage and freezing. Today, Paraguay has ten modern slaughterhouses, distributed throughout the country, directly employing thousands of people, from where the exports are carried out.
- International trade and marketing. The government has played an important role in generating market intelligence, promoting the participation of producers in International food fairs in Germany, France, Russia, among others, and implementing an aggressive marketing campaign to promote the country brand. Paraguay also enjoys a strong relationship with international agencies as the World Organization for Animal Health (OIE) based in France.
There is no doubt that the opening of Paraguay’s Single Trade Window (VUE) in 2005 has boosted the export boom, eliminating the manual procedure for the export of meat and simplifying the licensing and permit procedures that exporters had previously had to carry out in different areas of the National Animal Quality and Health Service, SENACSA.
Celso Alejandro Bareiro, VUE’s director, explains that the number of steps and documents required for exporting meat reduced from 32 to 3, and 16 to 4, respectively, generating savings of 240 hours (10 full days and nights) to only 3 hours. The VUE has a technological platform that connects different government entities and facilitates the delivery of electronic documents.
All of this resulted in new market openings in about 60 countries over a period of 11 years. Chile and Brazil are the first and third export destinations, followed in importance by Vietnam, Israel, Italy, and Hong Kong, with imports of beef and meat products such as liver, hearts, and internal organs. Today, meat is the country’s third main export after mineral fuels and vegetable products, such as soybeans. About 150,000 meat producers have a stock of almost 14 million head of cattle, twice the population of the country.
Furthermore, this export growth has had a spillover effect by growing the leather industry. In 2016, Paraguay exported about $140 million in tanned leather, manufactures and footwear to several countries in the world. It also expanded the market for other derivative products such as bone meal, that serves as balanced feed for poultry and pigs, and oils and soaps, that are made with animal fat extracts.
Although India and Brazil are by far the largest producers of meat in the world, Paraguay is committed to becoming the fifth largest producer and exporter of beef —currently the sixth— given the good fortune of having enough area to increase cattle up to about 20 million heads by 2020.
The government’s priority is, however, to maintain quality and consolidate its position in demanding markets such as the United States and China.
Paraguay must take advantage of the advances in reproductive and molecular livestock technology to increase productivity. Genes related to disease resistance or adaptation to adverse environmental conditions can now be identified and transferred.
In addition to reproductive technology, advances in logistics allow real-time monitoring of shipments, efficient route planning and safer handling of cargo.
How to increase sustainable farm productivity and stimulate trade are central to the Business Forum “Latin America and the Caribbean: A Growth and Development Agenda“, to be held in Asuncion as part of the Annual Meeting of the Board of Governors of the IDB and IIC from March 30 to April 2, where Paraguay will present its new country brand and share its export success with authorities, entrepreneurs, and academics from more than 30 countries.
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