Brazilian beef production is expected to end 2022 at 8.115 million tons, the lowest level in more than 20 years, while exports should advance to a new record, according to projections published by the National Supply Company on Monday.
A lower production of beef in Brazil is related, in part, to a movement of retention of matrices by ranchers, who seek to increase creation to take advantage of the good prices paid by cattle in recent years.
In this way, fewer cows go to slaughter, which supports prices.
“When there is an increase in the price of cattle, at first, it reduces supply, there is retention of cattle matrices, to increase production in a subsequent period”, said the director of Agricultural Information and Policy at Conab, Sérgio de Zen.
He believes that in two or three years, beef production will grow again.
De Zen, also a professor at Esalq/USP and a specialist in the livestock market, commented on the impact of converting pastures to agriculture, the limitation to opening new areas for animal husbandry and the technological challenges of the sector to increase productivity on a scale that can meet the demand.
“The efficient, modern producer cannot count on the opening of new areas, he is restricted, and seeks to optimize this area, that is, to increase productivity”, stated De Zen.
Bearing in mind that, on the other hand, there was a lot of conversion of pasture areas for grain production, such as soya and corn, for example.
He also observed a growing adoption of the integrated crop-livestock production system, which will collaborate so that, in the long term, there is greater efficiency in the use of land and greater production.
De Zen said that the research sector still needs to find pastures that are not only more productive, but also pastures that are more tolerant of cold periods.
In a note, Conab also cited the sluggish demand in the domestic market as a pressure factor for production.
The availability of beef per capita should be around 25 kilos per inhabitant/year, the lowest in a historical series started in 1996.
The per capita supply has already reached a maximum of 42.8 kg/inhabitant/year in 2006.
The domestic market is expected to capture around 65% of Brazil's beef production this year, while exports will take the rest, amid strong demand from China, which in the first half increased purchases of the Brazilian product by 35%.
Brazil, the largest global exporter of beef, is home to industry giants such as JBS, Marfrig and Minerva.
According to data from Conab, beef exports from Brazil are expected to rise to 2.8 million tons, an all-time high, versus almost 2.5 million in 2021, which helps explain why prices are at high levels, despite the weaker domestic demand.
If beef processing is falling, compared to beef at historically high levels, above 300 reais, which also contributes to raising costs for consumers, the production of chicken and pork meat, considered substitute proteins, has rose in recent years.
For poultry, production remains close to 15 million tons, which guarantees a per capita availability of 48.6 kilos per inhabitant per year.
The index, which reached its highest level last year, reaching 50.5 kg, is expected to register a slight drop of 3% in 2022, given the small reduction in supply, increase in exports and growth of the Brazilian population, Conab said.
In the case of swine, the highest production is expected for the historical series, estimated at 4.84 million tons, an increase of about 3% in the supply of the product when compared to 2021.
This scenario contributes to the trend of a slight increase in the per capita availability of pork in the Brazilian market, from 16.9 to 17.5 kg per inhabitant/year, which implies greater supply and downward pressure on the prices of the product. .
Considering the three meats, production is “stable” at around 28 million tons, said Conab.
“Even with the increase in sales to the foreign market of poultry and cattle, the per capita availability of meat in the country remains above 90 kilos per year, a volume that guarantees Brazilian supply,” said the state-owned company.
Exports of chicken meat from the country, also the largest global exporter of this product, tend to grow 6% and could reach a new record this year, exceeding 4.7 million tons, according to data from the state-owned company.
Sources: investing.com
