The rebranding of Argentina, built largely on beef, as a chicken producing nation is to continue apace next year, driving its exports to 10 times their level a year before.

The South American country is to produce a record 1.85m tonnes of poultry meat next year, higher than initially expected, thanks to the extent of investment in a sector gaining an increasing place in the local cuisine.

While Argentines remain the world's top beef eaters, eating 56 kilogrammes per person per year, annual consumption of chicken has topped 36 kilogrammes per capita, doubling in less than a decade.

"Chicken has stopped being a 'substitute' meat and became an 'alternative' meat," US Department of Agriculture officials in Buenos Aires said.

"Nowadays, with the same amount of money used to purchase 1 kilogramme of beef (short ribs) it is possible to purchase almost 3 kilogrammes of poultry," compared with a ratio of 1:2 two years ago.

Bigger in broiler than beef

However, exports have seen an even bigger impact of the country's expansion in poultry over the last decade, since currency devaluation in boosted Argentina's export potential at a time when avian flu was hampering Asian rivals.

"The country continues to make sustained efforts to maintain an excellent sanitary status and competitive costs," the USDA officials said in a report.

Argentina, now the fifth biggest broiler meat exporter, now ranks higher in poultry than in beef, in which it is the eighth biggest shipper, falling since 2009 behind the European Union, New Zealand  and Uruguay.

Government perks

The sector's growth reflects, besides the eradication of major diseases such as Newcastle disease, producers' easy access to feeds, with Argentina the second-ranked soybean exporter and third biggest shipper of soybeans.

While prices of these crops have increased worldwide, Argentine poultry companies receive  perks unusual for a government often seen as thwarting farmers by controls on exports and domestic food prices.

Producers gain compensation for corn prices above 293 pesos, about $69, a tonne in return for ceding some control over meat prices.

Furthermore, the industry is spared the heavy export taxes applied to some crops, of 23% for corn and 32% for soymeal, attracting duties of 2.5-5%.

Deal potential?

The favourable regime reflects the success in lobbying by a sector which is relatively concentred, with the seven leading producers responsible for 78% of slaughter, Rabobank said in a briefing last month.

"The relative concentration has allowed players in the industry chamber, Cepa, to work together and negotiate with the government has a united front," Rabobank analyst Paula Savanti said.

Despite the sector's concentration, there was still scope for acquirers to muscle into the market through deals – unlike in Argentine beef, which Cargill has quit of, Ms Savanti said.

The poultry groups are "small and medium-sized companies by international standards, and there is still room for consolidation and for other players such as grain producers or foreign companies to enter the market through acquisition".