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USDA GAIN: Livestock and Products


27 February 2014

USDA GAIN: Brazil Livestock and Products Semi-annual 2014USDA GAIN: Brazil Livestock and Products Semi-annual 2014

Post forecasts 2014 beef production to increase to 9.9 million metric tons, up 2.5 percent. Higher beef production reflects current industry optimism with an estimated record in beef exports mostly due to the depreciation of the Brazilian currency, which makes Brazilian beef highly competitive in the world market.

USDA GAIN: Livestock and Products

Commodities:

Animal Numbers, Cattle

Production:

Post maintains its previous 2014 forecasts of a nearly 2.5 percent increase in cattle inventories and 1.5 percent increase in the calf crop. The expansion of the Brazilian cattle herd is supported by higher investments in productivity, mostly in pasture improvements and higher use of quality genetics. In addition, current high cattle prices can allow producers to purchase more feed and other ingredients during the dry season to maintain cattle weights. Post also holds firm on its estimated increase of 4 percent in feedlots. However, a prolonged dry spell in the first quarter of 2014 could reduce the availability of cattle for slaughter throughout the year.

Trade:

Post forecasts an increase of 10 percent in 2014 cattle exports due to a sustained increase in shipments to Lebanon, Venezuela, and other minor markets, such as Jordan, Turkey and the Congo. The increase in cattle exports is supported by the devaluation of the Brazilian currency.

Commodities:

Meat, Beef and Veal

Production:

Post revised 2014 beef production upward by 2.5 percent due mostly to higher international demand and a small increase in domestic demand. The 17 percent depreciation of the Brazilian “real” over the past 12 months is likely to maintain Brazilian beef at competitive prices and improve margins for packers.

Domestic Consumption:

Post projects domestic beef consumption to increase only by a half percent in 2014. The factors affecting domestic consumption of beef are: higher beef prices, as compared to other meats (pork and broiler), and higher inflation combined with higher indebtedness of Brazilian consumers. However, some trade sources also believe that domestic beef consumption could benefit from an increase in animal protein consumption due to World Soccer Cup tourism.

Trade:

Post revised upwards 2014 beef exports to increase due mostly to the depreciation of the Brazilian “real” which makes the Brazilian product highly competitive in the world market. Brazilian exporters are optimistic about continued shipments to major markets such as the Russian Federation, Hong Kong, the European Union, Egypt and Iran, as well as the recovery in other import markets (e.g., China and Saudi Arabia) that had banned Brazilian beef last year due to the atypical BSE case in Parana.

February 2014

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