Brazilian beef production steadies

According to Embrapa (Brazilian Corporation of Agricultural Research), after increasing rapidly during the 1990’s, Brazilian beef production has registered much slower growth in recent years.

According to the US Department of Agriculture (USDA), the average annual increase from 1990 through to 2004 was actually 4%, but for the 10 years since then, the increase has been 1.5%, totalling 9.7 million mt cwe in 2014.

Growing with production, Brazilian beef exports increased from 80,850 tonnes swt in 1998 to 1.22 million tonnes swt in 2014. From 1998 to 2004, the EU was the major destination for Brazilian fresh beef, importing an average 120,000 tonnes each year, however since the partial ban in 2008, shipments declined considerably. Between 2005 to 2014, Russia was the main market representing an average 28% of yearly exports, and for the first five months of 2015, Hong Kong is now the major destination.

Also, according to the latest USDA forecast, Brazilian beef production is expected to increase slightly (0.5%) on the previous year, to 9.8 million metric tonnes cwe in 2015. At the same time, domestic consumption is forecast to remain stagnant given the difficult economic environment and the expected high beef prices, while exports are expected to grow 5%, assisted by the Real depreciation.

For the first six months of 2015 Brazilian steer and calf prices have hit record levels, with cattle slaughter down 8% in the first quarter and female slaughter accounted for 44% of the total – the lowest percentage for the same period since 2011. Consequently, first quarter beef production dropped 6% year-on-year, to 1.8 million tonnes cwt.