Brazilian Beef Exports Gain Competitiveness In Asia


BMI View: We maintain our forecast for Brazil's beef production to increase by 3.0% year-on-year (y-o-y) to 10.0mn tonnes in 2013/14 thanks to the greater availability of cattle for slaughter, stable domestic cattle prices, and the ongoing depreciation of the Brazilian currency. As a result of this, we believe the country will be particularly competitive for both cattle and beef exports in the coming months, especially compared to other traditional exporters such as the US and Australia.

We maintain our forecast for Brazil's beef production to increase by 3.0% year-on-year (y-o-y) to 10.0mn tonnes in 2013/14 thanks to the greater availability of cattle for slaughter, stable domestic cattle prices, and the ongoing depreciation of the Brazilian currency. The USDA forecasts an increase of 2.5% in cattle inventories and 1.5% in the calf crop in 2013/14. Local industry sources have reported that farmers have invested in productivity thanks to support from the government in the form of subsidised interest rates, encouraging pasture improvements and the use of quality genetics.

Stable cattle prices and sharply moderating grain prices have helped increase producer margins. The recent depreciation of the real is helping export demand, encouraging production and investment in the sector. In fact, the depreciation of the local currency makes the Brazilian export prices more competitive on global markets, but also enables farmers to earn more real for the same dollar dominated prices.

Growing Herd
Brazil - Cattle Beginning Stocks ('000Heads)

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This article is tagged to:
Sector: Agribusiness
Geography: Brazil