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Cepea, January 3rd, 2024 – The fed cattle activity has been affected by internal and external aspects in 2023. Productive, health, climate and economic issues resulted in a sharp price oscillation for all the products in the chain.
Fed cattle values surpassed BRL 300 per arroba (15 kg) in early February (considering the CEPEA/B3 Index for fed cattle – São Paulo state). However, in late August, it operated below BRL 200/arroba. At the end of 2023, the Index has returned to the BRL 250 level.
Considering the monthly series of the CEPEA/B3 Index (deflated by IGP-DI November/23), the September average was at BRL 214.67, the lowest since August 2012 (when it was at BRL 206.80).
According to researchers from Cepea, an atypical case of BSE (bovine spongiform encephalopathy) in February was a major impact on the market this year. The case resulted in the suspension of beef shipments to China. Still, the country was the major destination for the Brazilian product in 2023.
Beef exports to all destinations moved at a good pace in 2023, which was important to flow the supply increase in Brazil. The number of slaughtered animals has been increasing quarter after quarter. From January to September this year, 24.64 million animals were slaughtered, 11.4% more than in the same period of 2022 and the highest since 2014, according to data from IBGE.
Prices of calf and lean cattle moved down in 2023, following the trend registered for fed cattle; however, they did not recover as verified for the ready-to-slaughter animals. Feedlot farmers say that corn price drops from the second quarter of this year on was not enough to encourage the increase in this fattening system.
Concerning the domestic beef market, the demand was low in the first semester, when prices were high; however, it resumed increasing in August, matching with price drops.
SWINE – After facing a long period of losses, the swine sector has started a recovery movement in 2023 in Brazil, favored by lower production costs and record pork shipments.
The higher volume produced in the 2022/23 season, due to increases in area and productivity, pressed down quotes of most important inputs used in the swine sector (soybean meal and corn) from 2022 to 2023, boosting profits and the purchase power of producers.
Comparing the average in 2023 (up until Dec. 26) with that in 2022, the ESALQ/BM&FBovespa Index (Campinas, SP) dropped 28.3%, at BRL 67.12 per 60-kilo bag, in real terms (IPCA Nov/23). As for soybean meal traded in the same region, the decrease in real terms was 13.5%, at BRL 2,475.25 per ton.
As a result, swine farmers were able to buy 6.33 kilos of corn by selling one kilo of the animal on the average of 2023, 32.1% more than in 2022 and the biggest since 2020, according to Cepea calculations.
Concerning soybean meal, producers were able to purchase 2,81 kilos by selling one kilo of live pig, 8.2% above the result verified last year.
The increase of the purchase power is also related to live pig price rises. Quotations moved up in real terms in 2023 in all regions surveyed by Cepea. In the southwest Paraná, for instance, live pig values rose 13.6% from 2022 to 2023 (up to Dec. 26), averaging BRL 6.61/kg this year.
Concerning pork meat, slaughterhouses claimed to have difficulties to transfer price rises of the live pig to the meat, due to the low liquidity in the domestic market in most part of the year. From 2022 to 2023 (up to Dec. 26), special carcass prices dropped 0.6%, averaging BRL 10.08/kg, in real terms – IPCA Nov/23.
As for exports, 1.1 million tons of in natura and processed pork meat were shipped from January to November this year, 10.5% more than in the same period of 2022, according to Secex. It is worth noting that the sector exported more than 100 thousand tons for seven months in a row in 2023, which has never been observed in the Secex series. Therefore, the record registered in 2021, of 1.12 million tons, may be surpassed.
POULTRY – Chicken meat prices dropped significantly in the domestic market in 2023, due to the record production. Not even the good pace of exports, which hit a historical record for the third year in a row, was able to limit price decreases.
The chicken meat competitiveness compared to beef reduced in 2023, due to the higher volume of bovine animals slaughtered and to the increase of beef supply. According to data from IBGE, from January to September 2023, 24.64 million bovine animals were slaughtered in Brazil, moving up 11.4% compared to the same period in 2022 and the highest volume since 2014.
As for chicken, 4.75 billion animals were slaughtered from January to September, 4.6% more in relation to the same period last year and a record of the historical series of IBGE, which started in 1997.
The lowest price gap between prices of these two meats was registered in September, when chicken meat (whole, chilled) traded in the Greater of São Paulo was 8.83 Reais per kilo below beef carcass. It is also the lowest price gap since October 2019.
Most significant price drops for chicken meat were registered in July. Chicken meat (whole, chilled) prices traded in the wholesale market of the Greater São Paulo averaged BRL 5.64/kg, the lowest value since June/20, in real terms (IPCA Nov/23). From January to December, the price average was BRL 6.69/kg, downing 13% compared to that in the same period last year.
Concerning live chicken, quotations in June were the lowest since May/20, averaging BRL 4.49/kg, in real terms (IGP-DI Nov/23). Between January to December, the decrease is 11%, averaging BRL 4.85/kg.
Chicken meat exports, in turn, hit a new record in 2023, boosted by issues related to the Russia-Ukraine war – before the conflict, Ukraine was the sixth biggest chicken meat exporter – and by cases of H5N1 around the globe.
From January to November 2023, Brazilian chicken meat shipments totaled 4.6 million tons, 5.6% more than in the same period of 2022, according to data from Secex. The revenue obtained in the first 11 months of this year, of BRL 44.9 billion, was 2.7% lower in the same comparison. The revenue decrease, in turn, is linked to the dollar devaluation, of 4.7% in the period.
(Cepea-Brazil)
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Fonte: Cepea