Commodities Shuttle: Live cattle exports have the worst performance in recent years

The live cattle export market, which had been consolidating and had, in 2018, one of its best years, retreated, in 2021, to one of the lowest levels of the last decade.

Exports in 2021 yielded only US$ 66 million to Brazil, 70% less than in 2020 and 86% below the values ​​of 2018, according to data from Secex (Secretariat of Foreign Trade).

“It’s a ridiculous market”, says Gastão Carvalho Filho, from Boi Branco, a company that operates in this sector. The reasons are many, according to him.

External demand for beef is strong, Brazil has increased protein exports, and domestic beef prices have risen a lot.

For him, the market has become unfeasible, since the purchase of cattle and the costs of exporting live cattle are quite onerous, despite the dollar favoring sales.

In addition, Brazil suffers from competition from other participants in this market, such as Uruguay, which has better quality cattle; the European Union, which subsidizes exports; and Australia, which is closer to the main importing countries.

One of the costs that weigh more heavily on exports is sea freight, which has doubled in price, according to Carvalho. Cattle feeding also had a strong correction, due to the increase in the inputs that make up the ration.

The abrupt downturn in the cattle export market affects the sector. The companies prepared themselves with the expansion of infrastructure aimed at foreign sales.

Some have increased grain planting to reduce livestock feed costs. Others even invested in the manufacture of their own feed.

One hope is exports of cows and calves to China and Africa. In the case of China, the preference should be for animals from Uruguay. Brazil can gain space in Africa.

According to the Ministry of Agriculture, total exports of live animals, including poultry and swine, reached US$169 million last year, 44.5% less than in 2020.

Last year, the sector was the leader in poultry exports, which totaled US$ 88.4 million. In 2020, however, the largest exports were of live bovine animals, with a sum of US$ 217 million.

Milk Prices were sustained in the second half, but there was no improvement in the producer’s profit margins, according to analysts at Itaú BBA.

Milk 2 In the last quarter, however, the scenario got worse for the producer. There was an increase in milk intake and an 11% drop in product prices in December. The costs, however, have not eased.

Relation of exchange In January last year, corn producers in Paraná needed 27.7 bags to buy a ton of fertilizer. This year, there are 53.1, according to the consultancy MacroSector.

No profit Coffee producers in Minas Gerais, on the other hand, currently buy a ton of fertilizer with 1.8 bags. In January 2020, they needed 2.8 bags.

non-profit 2 The sugarcane producers in São Paulo also had an improvement in the exchange. With 19.9 tons of cane, they buy one of fertilizer this year. In January 2021, the ratio was 26.7 tons of cane for one of fertilizer, according to MacroSector.