Brazil - Livestock and Products Annual 2010

Beef production is forecast to increase in 2011 by 3.5 per cent and exports by 8.0 per cent, while pork output and exports will rise by 3.0 and 2.5 per cent, respectively. These are the predictions of Joao Faustino in the latest GAIN report from USDA Foreign Agriculutrual Service.
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The outlook for the Brazilian economy in 2011 calls for continued economic growth above five per cent, with lower inflation and a continued increase in consumer purchasing power. Brazilian meat exporters are also optimistic about growth of the world economy in 2011 and expect Brazilian exports of beef and pork to increase in their major markets. Post forecasts beef and pork production to increase around three per cent in 2011, supported by export growth and firm domestic demand for animal proteins.

Post revised production and export estimates for Brazilian beef and pork for 2010 to reflect new estimates made by trade sources. These estimates call for lower rates of growth for beef and pork production and exports than those previously estimated. In general, domestic demand for both meats is supporting the expansion in production this year.

Animal Numbers, Cattle


After several years of intense cow culling, the Brazilian beef industry is still facing lower availability of finished cattle for slaughter. And, the situation was aggravated by the lack of payment by some packers which filed a bankruptcy procedure to stall payment to producers. It is estimated that 15 medium-sized packers continue to be operating under judicial recuperation (after court approved bankruptcy restructuring plans). However, this situation is likely to improve in 2011 with new government finance support currently under review. Post forecasts an increase around three per cent in the cattle slaughter in 2011 and cattle inventories are expected to reach nearly 192 million by the end of next year.


The outlook for cattle exports is beginning to give signs of slow growth despite the increase of exports of nearly 20 per cent in 2010. However, in 2011, current estimates call for a drop of 18 per cent in cattle exports. The estimated decline is mainly attributed to lower exports to Venezuela which is delinquent in payments to Brazilian producers. The state of Para in the Amazon region is the main source of live cattle for exports. Brazilian beef packers and exporters continue to criticize exports of live cattle specially now during a period of lower availability of cattle for slaughter. The hides and skins industry also supports beef exporters’ complaints about live cattle exports.

Meat, Beef and Veal


Post forecasts beef production to increase at around three per cent in 2011 due to the following factors: a) increased exports, b) continued growth in domestic demand for beef as the Brazilian economy is expected to grow in 2011 at a rate above five per cent, and c) higher consumer purchasing power which benefits consumption of animal proteins.

Post revised downward its 2010 beef production estimate by one per cent over last year due to the shortage of finished cattle for slaughter. However, increased domestic consumption helped the sector from a further decline in production, as consumer purchasing power remained constant. Lower beef exports than previously anticipated also contributed to slower growth in production.


Post forecasts beef exports to increase by eight per cent in 2011 as Brazilian beef exporters are optimistic about the economic recovery in their major markets, and new continued growth in exports to markets recently opened such as Indonesia and Chile. They also expect a continued recovery in the European beef market as more Brazilian cattle farms are enrolled in its traceability program. In addition, they also expect a recovery in processed beef exports to the United States after a major decline in 2010.

Post revised beef exports in 2010 due to the impact of the current Ivermectin issue with the United States, which reduced exports of processed beef by more than 50 per cent. In addition, lower exports to Russia and other key markets reduced the rate of growth in exports from 15 to five per cent this year. However, the value of exports in 2010 is expected to increase by over 30 per cent despite the valuation of the Brazilian currency which affects export profitability.

Note: Differences between export data reported by Brazilian trade sources and those used by Post are due to the use of different conversion factors. Brazilian sources use a 2.5 per cent factor for conversion of processed beef into Carcass Weight Equivalent (CWE), while post uses 1.79. The same applies for boneless beef, as Post uses 1.40 as the conversion factor, while Brazilian trade sources use 1.36. In addition, and as per FAS reporting instructions, variety meats (beef offals), HTS 0206 are not included for reporting purposes in our PSD and Trade Matrix tables.


The National Bank for Economic and Social Development (BNDES), the largest subsidized financing source of credit to the Brazilian industry in general is being strongly criticized in Brazil by contributing to the high concentration of Brazilian meat packing industry (beef, pork and poultry). Cattle producers complain that the concentration of the Brazilian beef packing industry among two major groups reduced the competition in the sector. Both cattle producers and packers remain concerned about the lack of competition of Brazilian beef exports due to the valuation of the Brazilian currency.

Further Reading

- You can view the full report by clicking here.

October 2010

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