Even with the news of China’s return to the Brazilian market, fat cattle arroba had a reduction this Wednesday (15), falling to R$ 308. The day before, it had been traded at R$ 310.4.
According to Thiago Bernardino de Carvalho, researcher at Cepea (Center for Advanced Studies in Applied Economics), the drop in the arroba is due to the fact that wholesalers are unable to transfer prices to supermarkets, and these to consumers.
The transfer occurs only in noble cuts, but not in quantity. The slaughterhouses are stocked and leave the purchases of live cattle because they can’t get this transfer to retail.
Data from Cepea indicate that the so-called married carcass, which includes prices for the rear, front and needle tip, is with a retreat of 2.55% this month.
The average value of the rear, which contains the most noble meats, increased by 2.6% in the period. In the case of the front, less prime meats, the drop is 10.4% in the period.
High inflation, the current level of beef prices and the population’s loss of income do not allow for further readjustments in proteins.
Assessing the absence of China from the Brazilian market in the last three and a half months, Maurício Palma Nogueira, director of Athenagro and coordinator of the Rally da Pecuária, says that it was a period of help for both countries. They searched for new paths.
Both saw that exclusive reliance on just one market is dangerous for both seller and buyer. China looked for new suppliers, and Brazil, new buyers.
For Ricardo França, agribusiness superintendent at Santander, the pulverization of markets is essential for the country. Reliance on sales to just a few buyers is not convenient.
Nogueira says that this dependence between the two markets occurred because Brazil had what China needed in this period of African swine fever in the Asian market and of the pandemic.
Dependence is not good, even for the Chinese, says Nogueira. They are very vulnerable. A severe weather effect in Brazil could leave China without a supplier.
Exports from Brazil, however, are also important for a balance in the domestic market. They provide support between offers for the domestic and foreign markets, according to the director of the consultancy.
Nogueira believes in an expansion of the demand for proteins in the coming years. Margins should be more balanced with the arrival of startups and large companies that will take advantage of opportunities in this market.
As a result, the entire production chain gains, and consumer demand increases, due to greater supply and more affordable prices.
And the country has room for growth in supply, as there is a tendency for national productivity to advance. The Rally da Pecuária, an event that monitors livestock farming annually, detected that producers who use technology make good progress.
In its tenth annual stage, the Rally expedition found that producers accompanied by the event, and who use technology, had an average advance in productivity of 5.7% per year in the last decade. The average for national livestock was only 2.3%.
According to the director of Athenagro, ranchers have been investing R$ 13 billion in productivity per year.
By 2025, these investments should double, as the scenario is positive in this market.
One of the main investments is in pastures. The country has 153 million hectares under exclusive use, and 5.9 million are in need of renovation. Another 14 million are expected to be recovered in the coming years and 67.5 million will need to be recovered in a period of 12 to 48 months.
Athenagro outlined some scenarios between Brazilian livestock and the requirements of COP26. At the most optimistic, the reduction in relative emissions would reach 52% per kilogram of meat, with the global targets being a 30% drop in emissions.
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.