The cow disappeared from her plate. Since 1996, Brazilians have not eaten so little beef. According to the National Supply Company (Conab), in the last year, we consumed, on average, 24.8 kg of meat per person. In 2019, it was 30.6 kg.
The initial explanation is inflation, of course. The IPCA (Broad Consumer Price Index) shows that the prices of sirloin and rump steaks rose by more than 9% in 2021.
The dollar above R$ 5 favored exports and made the Brazilian market less and less attractive for meatpackers.
Take a look: In the accumulated result for this year, up to July, beef exports increased 20.65%. And, most impressively, the revenue generated from these exports increased by 46.65%, as disclosed by the Brazilian Association of Refrigerators (Abrafrigo).
In other words, not only did external demand increase (in quantity), but foreigners were willing to pay much more.
A new scenario is now taking shape in Brazilian corrals. Analysts and companies in the sector see a new cycle of high availability of cattle in Brazil, which makes slaughtering cheaper and increases profit margins (since prices are not expected to drop).
China continues to import meat in volumes and prices well above the market, as reported by the analysis house Eleven. And this serves to sustain prices at a level close to the current level for longer, explain the experts at BTG Pactual.
Despite high external demand and cheaper slaughter, companies should choose to put fewer steaks on supermarket shelves. According to Conab’s projections, Brazilian beef production should end 2022 as the lowest in the last 20 years.
This at the same time that beef exports are expected to increase by 15%.
Chicken meat exports are also expected to grow 6% this year and hit a new record with 4.7 million tonnes shipped. This increase should be driven by the variant of avian flu that has already killed 76 million birds, according to the Bank of America (BofA), affecting mainly the United States and France.
With the slaughter of chickens, poultry importers such as Mexico and China end up transferring orders from the US to Brazil, according to BofA.
The scenario of heated external demand, lower costs and falling production seems bad for shopping at the supermarket, but it can be interesting for those who want to shop on the stock exchange.
The numbers of Brazilian meatpackers will be made public on the 10th and 11th, when JBS, Marfrig, BRF and Minerva will disclose their quarterly results. Analysts’ estimates for the share price show that they are optimistic about a sector that, this year, with the exception of Minerva, is losing to the Ibovespa.
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
