Brazil fed cattle prices drop steeply in August - CEPEA
Supply, demand pressures weighing on valuesFed cattle prices dropped steeply in Brazil in August, according to a market report from Brazil's Centre for Advanced Studies on Applied Economics (CEPEA).
In São Paulo State, the average of the CEPEA/B3 Index for fed cattle (until August 29th) closed at BRL 222.32 per arroba (15 kg), a steep 24% down from that in August 2022 and the lowest, in real terms, since July 2018, when it closed at BRL 222.06/arroba (the monthly averages were deflated by the IGP-DI).
It is important to highlight that, in the last week of the month, the CEPEA/B3 Index for fed cattle hit BRL 200/arroba, which had not been observed by Cepea since May 2020, in nominal terms.
Pressure on values came from both supply and demand. Besides the higher number of animals ready for slaughter, farmers made more batches available in the spot market, fearing steeper devaluations. As for demand, many agents from slaughterhouses reduced purchases, due to longer slaughter scales and the lower prices paid by China for the Brazilian beef.
Price drops were observed in all the regions surveyed by Cepea, but in São Paulo, devaluations were steeper. Thus, the gap between the averages in SP and in other states narrowed in August. Many slaughterers from SP purchased animals from other states, limiting price drops in these origins.
Last month, the average price for fed cattle closed at BRL 222.32/arroba in SP, at BRL 211.81 in Mato Grosso do Sul, at BRL 202.69 in Minas Gerais, and at BRL 199.73 in Goiás.
(BRL 1 = USD$ 0.20)