“Let Them Eat Donkey Meat”: Javier Milei’s Economic “Miracle” Enters New Phase

“Argentina should focus on what it is ‘inherently competitive’ at: agriculture, mining, oil and gas. What God has given us.”

When it comes to cattle ranching and beef production, Argentina is a global powerhouse, with its vast, fertile Pampas plains, high-quality grass-fed beef (though standards appear to be slipping), and cultural tradition of gauchos. But the local populace is increasingly being priced out of the market as the price of beef surges at double the rate of headline inflation.

While headline annual was 32.6% in March 2026, the price of meat saw increases of between 55% and 61%, depending on the region of the country. It’s hardly a surprise, then, that beef consumption fell 10% month on month. According to recent data, beef consumption in Argentina has fallen to 20-year lows of around 47.3 – 49.9 kg per capita per year.

In fact, the price of meat has risen so sharply in recent months that Argentina’s faux libertatrian President Javier Milei even made reference to the phenomenon last week following the latest release of monthly inflation figures. According to the Institute of Statistics and Census (INDEC), inflation increased 3.4% in March 2026, its highest level in the past 12 months.

That figure represented a sharp increase on February (2.9%). It was also the tenth consecutive month of month-on-month increases in inflation. On an annual basis, inflation is now as high as 32.6%. Granted, that’s still much lower than it was 27 months ago when Milei took over the reins and sent inflation to the moon with a 52% devaluation of the Argentine peso, but the mere fact that it is once again rising on a consistent basis is a major cause for concern.

Argentina under Milei: inflation increases for tenth consecutive monthhttps://t.co/weEBSvLGVt

— Thomas Kennedy (@tomaskenn) April 15, 2026

Also, keep in mind that these inflation figures are much lower than they should be, as is the case in most countries. The basket for calculating the consumer price index (CPI) in Argentina is based on a consumption survey from 2004/5, which leaves out profound changes in the structure of household expenditures that have taken place over the past 20 years.

Amazingly (or then, perhaps not), every government of the past two decades has refused this approach out of fear that it would result in much higher inflation numbers. Milei had promised to break this cycle, but then chickened out. Applying the new CPI model would make Argentine inflation seem even higher, the Central Bank of the Republic of Argentina (BCRA) acknowledged.

After the latest release of inflation data, a rather desperate Milei said: “If we take core inflation and remove the effect of meat, it is the same as last month at 2.5%.”

But every crisis presents an opportunity. And that opportunity has so far been to the benefit of producers of cheaper meats and other key sources of protein, such as pork, chicken and eggs, which saw record sales last year. But their prices are also surging, leaving many consumers and businesses struggling to keep up. More and more customers are having to pay on credit, a Buenos Aires-based butcher tells Página 12:

“Food is also beginning to be paid in instalments. You restructure the sale. People then went from buying beef… to pork or chicken.”

These conditions have presented an opening for producers of a more niche product: Patagonian donkey meat. Last week, an open tasting of barbecued donkey was held at a local grill in the province of Chabut. The main attraction was that the meat was selling for just under a third of equivalent cuts of beef. Besides making bank, the apparent aim of the tasting was to challenge cultural perceptions of this, until now, overlooked and underused foodstuff.

Personally speaking, I have never, at least knowingly, eaten donkey meat, and would be intrigued to hear the opinions of readers who have. In some parts of the world donkey is apparently considered a delicacy, including parts of China (Gansu province and the bordering areas of Xinjiang, Qinghai, Ningxia and Inner Mongolia) “where it is revered as the earthly equivalent to dragon meat”, writes Laura Kelly in her book, The Silk Road Gourmet:

Donkey meat is also available in Beijing, Shanghai and most big cities in between, but Gansu is the epicenter of donkey cuisine and where the most delicious dishes can be found. I sampled several donkey dishes, but by far the most delicious was the Donkey with Yellow Noodles (lurou huangmian) had in Dunhuang.

The meat is tender, sweet and delicious. It tastes nothing like pork or beef. For obvious reasons, it does taste a little like horse, only it is sweeter and more tender, and like horse and many hoofy game meats it is also low in fat and high in protein. In addition to tasting good and being a healthy meat, it is also, very inexpensive, which I am sure adds to its popularity.

Whether the same will be true of gaucho Argentina remains to be seen. The footage below, of an Argentine journalist grimacing her way through a tasting session, is unlikely to change public perceptions.

Argentina’s beef under Milei has become so expensive that people are turning to donkey meat. Here you see a reporter from a right wing news channel attempting to eat it, struggling to chew it, & pretending to enjoy it as cope. What Milei’s government has reduced our country to. https://t.co/jJZ1VeUYUa

— Thomas Kennedy (@tomaskenn) April 19, 2026

Even if the public appetite for donkey meat were to suddenly rise, producers would still face regulatory obstacles to being able to sell their product nationwide, reports Colombia’s El Tiempo. But Milei’s famed chainsaw would no doubt make quick work of any impediments, especially if well-connected business figures began investing in donkey farms.

Milei’s government has already slashed regulations for more established meat industries. The resulting lax practices have already resulted in the suspension of imports of Argentine beef by Chile over health safety concerns. China, the biggest buyer of Argentine beef, also recently suspended imports from the ArreBeef meatpacking plant due to the alleged presence of the antibiotic chloramphenicol, which has been banned in many countries for decades.

The US, meanwhile, is buying more Argentine beef than ever before, thanks to Trump’s recent decision to expand US beef imports well above WTO quotas, despite the disastrous effects it could have on US producers. Lori Wallach, the director of Rethink Trade, describes the contentious move as a favour for Trump’s “rightwing Argentine leader buddy”.

Trump just screwed the ranchers & farmers who voted for him

He's the first POTUS to use a 1995 law to expand US beef imports above WTO quotas

He's trying to help a failing rightwing Argentine leader buddy.

This move is not about & won't result in lower US beef prices…🧵1/ pic.twitter.com/0YGq2lD26g

— Lori Wallach (@WallachLori) February 7, 2026

The sudden interest in donkey meat comes at a delicate time for Milei’s government. Following a spate of scandals, including the $LIBRA meme coin scandal involving Milei and his sister, Karina, the government’s approval ratings have sunk to 36%. Meanwhile, the economy shows no sign of turning the corner.

As the Wall Street Journal acknowledges, the recent gains in oil and gas production — largely the result of investments made in infrastructure by previous governments —  and mining, particularly lithium and copper, have done little to lift the domestic economy:

Investment in job-creating sectors such as manufacturing and services remains weak, and unemployment has risen.

Argentina now resembles “two different economies living in one,” said Mauricio Monge, senior Latin America economist at Oxford Economics: a fast-growing export sector alongside a stagnating domestic one. Inflation, while sharply lower, is still high by international standards.

The resurgence of inflation has called into question what was until now considered the Milei government’s most important achievement, notes El País:

The price increases, together with the rise in unemployment, the increase in labour informality (it’s already at 43%), the fall in consumption and the purchasing power of wages paint a critical scenario for the Executive: the polls coincide in the observation of a growing social unrest with the direction of the economy and a marked loss of support for the president.

Milei has recognized, in part, the problems and has asked for “patience” from Argentines. But, at the same time, he has insisted that he will not modify his economic plan in any way.

“The chainsaw does not stop,” he said Tuesday at the annual meeting of the American Chamber of Business in Argentina (AmCham). “We are going to continue cutting public spending to be able to continue lowering taxes because taxes are theft […] We are going to take all the pesos off the street until the inflation rate collapses […] We are not going to give an inch in monetary policy, we are not going to give an inch in continuing to deregulate,” he reiterated. “We are going to tie ourselves to the mast of the ship, we are not going to listen to the siren songs.”

Argentina is still massively in hock the IMF, which just approved the disbursement of an additional $1 billion from the $20 billion bailout agreed in April 2025. That came just months before the $20 billion currency swap provided by the US Treasury Department in the run-up to the country’s mid-term elections in November. From the El País article:

With this disbursement, the South American country will have received about 15,000 of the 20,000 million agreed in April last year. Argentina is the largest debtor of the IMF and its obligations to the multilateral increased by 36% in the last twelve months: in total, its debt exceeds 57,000 million dollars.

As the debt continues to rise, the Milei government insists that conditions are about to significantly improve. As they have been saying for the past two years, recovery is just round the corner.

“We are entering a virtuous process in which I believe that, starting in April, the next 18/20 months are probably going to be the best that Argentina has seen in recent decades,” said Economy Minister Luis Caputo last Tuesday in his presentation to the business forum of the United States Chamber of Commerce in Argentina.

Caputo is not only a serial debtor, having already played a key role in the collapse of the Macri government’s finances that resulted in a $50 billion bailout in 2018, he is also, like almost every other senior figure in the Economy Ministry and central bank, a former JP Morgan banker. And it is the bankers who are arguably benefiting most from the Milei government’s model, whose monetary policy continues to provide fast and easy “carry trade” returns for speculators.

One of the reasons Caputo cited for his optimism about Argentina’s economic future is Milei’s global brand:

“[T]he president is one of the three most important world leaders, the Argentine case generates admiration in the world and that is a kind of shortcut to investments.”

As delusions go, this is a particularly strong one. Milei may be lauded in Israel and among certain segments of the far right in Europe, Latin America and North America. As we noted last August, even many libertarians and Austrian economists are pillorying Milei’s economic program.

Meanwhile, investments are not just not coming to Argentina, they are actively leaving the country. Last year was the first year on record (going back 22 years, through multiple financial crises) that foreign direct investment in Argentina actually went negative, as a wave of international companies sold their operations to local companies.

Over the past year or so, we have covered Argentina’s rampant deindustrialisation under Milei in some detail. We have outlined how extractive sectors such as finance, mining and oil and gas have grown while industry and commerce have collapsed. In an article for Die Zelt, the development economist Patrick Kaczmarczyk provides added detail (machine translation):

Physical production shows how an economy really is doing more reliably than any GDP estimate. Argentina Industry shrank by 7.9 percent between 2023 and 2025, according to an evaluation of UN industry data. It is the second largest decline among 56 countries surveyed worldwide. Only in Hungary was the decline even greater at 8.2 percent. In the same period, however, Brazil’s industry grew by 3.5 percent, Chile’s by 5.2 percent and Peruvian by 6.5 percent. In Colombia and Mexico, industrial production fell by less than one percent. In view of these figures, it cannot be said that global factors alone explain the Argentine crash.

Data from Argentina’s statistics agency Indec from January show that the situation continues to deteriorate. The entire industry is now using only 53.6 percent of its capacity. In autumn, the occupancy rate was still a good 61 percent. The slump is hitting precisely those sectors that stand for vertical integration and employment. In the automotive industry, only 24 percent of capacities are still being used – three out of four machines are at a standstill. Vehicle production slumped by 30 percent. In mechanical engineering, capacity utilization is 31 percent.

Francisco Paoltroni, a senator from Milei’s ruling party, articulated the underlying philosophy with disarming frankness: Argentina should focus on what it is “inherently competitive” at: agriculture, mining, oil and gas. What God has given us.” But the fact that economies that rely on the extraction of raw materials do not create broad prosperity or economic resilience is one of the oldest findings of development economics. But it does not appear in Milei’s worldview.

Instead, the focus is almost exclusively on the extractive industries already mentioned and the exportation of their products to foreign markets. On the positive side, the balance of payments has improved as exports rise and imports stagnate, due to collapsing internal demand and industrial production. However, even as the balance of payments has improved under Milei, the central bank’s coffers are still dangerously low.

In recent months, Caputo has signed fresh agreements with the three main multilateral organisations that are keeping the Argentine economy afloat (IMF, World Bank and the Interamerican Development Bank). This should provide a brief period of relative stability. But with $30 billion of redemptions due in 2027 as well as general elections, which tend to create greater financial stress, the government needs to build up foreign exchange reserves fast.

However, most of the reserves the government accumulates end up being used to service its gargantuan debt with the IMF and other lending institutions. Unless it is able to build up a strong enough buffer, the inevitable question arises: when will the next bailout — number 22 — come? My guess is it will be some time in the run-up to next year’s elections, though it could come sooner as global economic and financial conditions deteriorate.

Just as importantly, where will the next bailout come from: the IMF, which is already dangerously exposed to Argentine debt (as readers may recall, some senior IMF staffers were so opposed to the last bailout, almost exactly a year ago, that they were willing to walk away from their jobs), the US Treasury, or a combination of both, as happened last year?

Also, what will the lenders demand for as collateral?

As we have discussed previously, Argentina boasts considerable mineral wealth (including shale oil and gas, lithium, gold, silver, rare earths and uranium), and has already signed a critical minerals deal with the Trump administration. Washington also has its sights set on Ushuaia, for two obvious reasons: the Patagonian city is the primary gateway to Antarctica and also sits astride the Drake’s Passage, the Americas’ second bioceanic passage after the Panama Canal.

One last warning sign before signing off: the latest official data from the BCRA, showing that delinquent bank loans tripled in 2025, suggests that serious strains are growing in the domestic banking system. The proportion of households in arrears went from historically low levels to figures that have not been since since the 2001 crisis, according to the BCRA’s official survey.

The deterioration was particularly pronounced in credit card debt, where the percentage of delinquencies almost doubled in just six months to December, and in personal loans, reports Infobae. Given the chronic persistence of the main driving forces — positive real interest rates, high (and rising) inflation, falling real wages, rising unemployment and overall rising precarity — this trend is unlikely to change anytime soon.