Brazil grabs juicier stake of world beef market

BRAZIL - Driving across his 3,000 hectare ranch near Cuiabá in central Brazil, Arno Schneider pulls over his pick-up truck and points to a stretch of pasture of an almost luminous green.
calendar icon 6 July 2007
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“We can put up to 10 cattle per hectare on land like that,” he says. “That’s the richest pasture we have today, but we have the techniques to go further. The sky’s the limit.”

Those are words to strike fear into the hearts of beef farmers in developed countries, facing increasingly strong competition on world markets from Brazilian exports.

Brazil is now the second biggest beef producer in the world after the US, producing more than 9m tonnes, up from 6m a decade ago, compared with about 12m in the US. But while the US is a net importer, Brazil’s new productivity has been directed mostly at export markets.

From a lowly sixth place among beef exporters 10 years ago, with a little more than 300,000 tonnes, Brazil has shot to world leadership, exporting more than 2.4m tonnes last year.

Brazil’s biggest market is Russia, which accounted for 29 per cent of exports this year, followed by Egypt with 12 per cent, the UK with 6 per cent, Hong Kong with 5 per cent and Iran, Italy, the US and the Netherlands with 4 per cent each.

The transformation has its roots in the 1970s, when farmers like Mr Schneider began migrating from the traditional farmlands of the south of Brazil – where the soil is among the most fertile in the world – further north to the formerly semi-arid cerrado, a low scrub, where little formerly went on apart from occasional mining and low-density ranching.

The soil was acidic, high in aluminium and low in nutrients. The incoming farmers solved all three problems at a stroke by adding limestone.

Further advances were led by institutions such as Embrapa, the government agricultural research body. It developed new strains of grass that increased the potential density of cattle to about one animal per hectare.

“That is the maximum capacity that the soil has on its own to provide nutrients for beef cattle,” Mr Schneider says.

Brazilian beef have traditionally been fed on pasture alone. Over the past few years, farmers like Mr Schneider have been working to increase productivity.

At its simplest, this is a matter of providing the nutrients that the soil turns into grass and the cattle turn into beef. It also involves the use of cattle feed during the animals’ last weeks of life, still out in the fields. In practice it is not so straightforward. “It would take a book to describe all the techniques involved,” Mr Schneider says.

Source: Financial Times
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