Brazilian cattle prices buoyant, exports on the rise

Brazilian cattle prices remained buoyant for the first four months of 2016, despite the slight decline during April, reflecting the continued tight availability of ready-to-slaughter cattle and stronger international demand. Additionally, cattle producers have been encouraged to retain cows in their herd rather than send them to slaughter – a result of high calf prices driven by low calf availability, and a sign a herd rebuilding phase is imminent.

• São Paulo state steers averaged R5.19/kg lwt for the January to April period (approximately 137USȼ/kg lwt), up 6% year-on-year (in Real terms). In contrast, in US$ terms, the strong Brazilian Real depreciation against the US$ has pressured steer prices to decline 22% compared to the same period last year, underpinning the competitiveness of Brazilian beef overseas.
• Calf prices also increased, with Mato Grosso do Sul state calf prices (nelore, eight to twelve months) averaging R7.10/kg lwt (approximately 185USȼ/kg lwt).
• Beef wholesale prices continued to rise in 2016, with hindquarter and forequarter prices up 10% and 21%, respectively, with processors reporting difficulties in selling beef in the domestic market.

Brazilian beef shipments for the January to April period rose 18.5% on the previous year, to 373,914 tonnes swt, driven by strong demand from Hong Kong, Egypt and China. The total value of beef exports rose by 15%, to US$1.43 billion – a result of higher volumes, as the average export price per kilo declined 9% year-on-year, to US$ 3.85/kg.

Brazilian Beef exports – top destinations (tonnes swt):