Brazilian Cattle Prices to Remain High

BRAZIL - Brazilian cattle prices are expected to remain high throughout 2011 underpinned by the continuation of steady production and rising domestic and export demand, according to analysts at Meat nd Livestock Australia.
calendar icon 2 February 2011
clock icon 1 minute read
Meat & Livestock Australia

Although total Brazilian cattle slaughter was estimated to have increased between one to two per cent in 2010, surging demand, both from the domestic market and export markets pushed prices higher, MLA said.

For the past calendar year, Brazilian cattle prices averaged 27 per cnet higher, at US¢168.2/kg lwt - with prices peaking at US¢230.2/kg lwt in the first week of November.

Since the herd liquidation of 2004 to 2006, the Brazilian cattle industry has been trying to rebuild numbers, with female cattle retention rising. Local analysts expect that higher cattle supplies, the result of increased calf production since 2007, will begin to hit the market in late 2011 or early 2012.

However, MLA said that the relatively stronger demand will limit any impact on prices from an increase in supply price (Informa Economics FNP).

Processors, which have struggled with low capacity utilisation after a period of strong expansion since the mid-2000's, are again expected to have a profitable and growing domestic market competing for export product throughout 2011.

Competition from poultry meat and pork is not expected to increase significantly in the domestic market in 2011, with prices and production expected to come under pressure from rising grain prices.

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