Barebone Supply Chain for Beef Spurs the Bullwhip Effect (and Inflation)

Two important food news this week: Argentina is banning the export of beef, and US pizzerias are running out of pepperoni. 

Both are related and unrelated to COVID. Both demonstrate how complex and convoluted supply chains have become, as well as the macroeconomic implications they have. 

Let’s beef up this story a bit (if you don’t like dad jokes, this is not the post for you). What has been causing these issues in Argentina? 

“Argentines, who traditionally have been among the world’s most voracious red-meat eaters, have seen their intake reduced steadily amid declining income and diet changes. A prolonged economic slump means annual per capita beef consumption has fallen to 48 kilograms (106 pounds), the lowest level in data on record, and far less than the 2009 peak of 69 kilograms, according to beef industry group Ciccra.”

While beef consumption has been declining in Argentina, beef remains a disproportionately preferred ingredient of the food basket. Argentina is the biggest consumer of beef per capita. The US, which follows, consumes around 80 pounds of beef per capita. But it goes deeper. As the article hints, in Argentina, beef also has cultural importance as the traditional family meal. Thus, the impact: 

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