Fed cattle values are moving down in Brazil; exports continue firm

Cepea, May 16, 2024

CATTLE – Fed cattle prices continue to decrease in most regions surveyed by Cepea. Although the delivery window is long in many meatpackers, the proximity of milder temperatures has been resulting in expectations of a supply increase of pasture-raised animals.

Players from meatpackers have been offering lower quotations for new deals, but only a few trades are closed at these price levels. Still, prices are moving down. The CEPEA/B3 Index for fed cattle (São Paulo State) dropped 1.24% in May (up to May 15), closing at BRL 226.50 on May 15. In the wholesale market of the Greater São Paulo, beef carcass values downed 0.73% in the same comparison, to close at BRL 16.24/kilo.

From January to April, 835.15 thousand tons of beef (in natura and industrialized) were shipped by Brazil, 37.1% up in relation to the same period in 2023, according to data from Secex. China boosted purchases by 40% and Hong Kong, by more than 15%. Between January and April this year, China purchased 374.63 thousand tons of Brazilian beef and Hong Kong, 40.21 thousand tons.

The United Arab Emirates has been in the spotlight because of the sharp increase of acquisitions of the Brazilian product, buying 245% more from January to April this year compared to the same period last year, to 64.78 thousand tons.

SWINE – Floods in Rio Grande do Sul have been affecting the transportation of live pigs to slaughter, of pork meat to wholesale markets and of inputs used in the activity. Players surveyed by Cepea report that bridges and roads that connect important producing areas, such as Vale do Taquari, Serra Gaúcha and Santa Maria, were destroyed.

Swine farmers from Serra Gaúcha and Santa Rosa have been having difficulties to close deals inside and outside the states in early May, due to logistical issues. It is important to mention that some cities that Cepea does not follow were more severely affected by rains.

In 2023, Rio Grande do Sul slaughtered 9.2 million animals, accounting for 20% of total slaughters in that year. Therefore, the state slaughtered the third highest number of animals in Brazil in 2023. Moreover, Rio Grande do Sul is an important exporter of pork meat, being responsible for 23.1% of the volume sold in 2023.

POULTRY – Floods in Rio Grande do Sul state in May have caused losses to the poultry sector in some regions, mainly in the central area.

Players surveyed by Cepea say that floods and the destruction of bridges and roads have brought difficulties for farms to receive inputs for the production (such as corn and soybean meal).

Agents from meatpackers surveyed by Cepea indicate that, in some cases, slaughter facilities were flooded, while other units cannot receive new animal batches due to logistical issues. The meat transportation has also been affected.

Part of the regions had no electricity, which is very delicate in the poultry sector. At farms, the lighting at night is important to birds, while the refrigeration at the industry is affected.

It is worth noting that Rio Grande do Sul was responsible for 11.4% of slaughtered animals in Brazil in 2023, according to data from IBGE. Moreover, the state is a major chicken meat exporter, accounting for 14.8% of the volume sold by Brazil last year.

(Cepea-Brazil)