January 18, 2005

 

 

Brazil Beef Industry Top Global Business

 

Deft management of cattle breeding technologies has helped Brazil leap to the top of the global beef business and made the South American country home to the largest cattle herd on the planet and the world's biggest exporter of beef. The science behind the breeding -- embryo transfers, in vitro fertilization and artificial insemination -- is not new. Nor is Brazil a newcomer to the beef business; its vast pastures have long nourished all manner of livestock.

 

But the cost of breeding technologies shrank in recent years, just as a devaluation of Brazil's currency, the real, made exports more attractive internationally. The confluence of the two spurred ranchers to embrace modern reproductive methods, producing stronger animals and cutting the time it takes cattle to reach slaughter weight, from four years to about two.

''Breeding has improved the productivity of the animals and the quality of the meat,'' says Bill Westman, agricultural attach¨¦ at the U.S. Embassy in Brasilia. "And the potential remains fantastic.''

 

INCREASED EXPORTS

 

Exports of Brazilian beef have tripled in just five years, from 464,000 tons of meat in 1999 to an estimated 1.35 million tons in 2004. The United States does not buy fresh Brazilian beef because of a ban imposed after an isolated outbreak of food and mouth disease in 2002. While the U.S. Department of Agriculture is reviewing the ban on fresh Brazilian meat, cooked beef is still imported, accounting for much of the meat in canned and frozen dinners sold in the United States.

 

Hungry for even more growth, Brazilian ranchers are on a drive to further improve their herds, fueling a booming market for pedigree cows and bulls. Not just the animals draw record prices. Breeders also pay top prices for the sperm, eggs and embryos of a new class of superstar cattle.

 

Consider Opera, one of Brazil's diva cows. In her 10th year of providing embryos, Opera has been the source of eggs for more than 150 offspring, most of which are prized for the same quality as their mother: transmissibility -- or the capacity to pass desirable traits, such as fertility and a robust build -- on to future generations.

 

One of Opera's granddaughters, Italia, ranks just behind Opera in fertility tables kept by breeders. A daughter, Fadamy, ranks third. At a recent embryo auction in Rio de Janeiro, one of Opera's eggs -- fertilized by the semen of a bull named Fajardo -- sold for 560,000 reais, or $200,000.

 

Auctions of pedigree cattle and their reproductive material are daily events. Canal Rural, a Brazilian television channel, broadcasts them live for the benefit of far-flung buyers, beaming images of burly bovines across the country.

 

The market is such that in September a bidder purchased half-ownership of one cow, Recordaçao, for 2.24 million reais, raising her value to 4.48 million reais, or $1.6 million -- a record for her breed.

 

UNIQUE GENES

 

Recordaçao, like Opera, is a Nelore, a white, hump-backed variety of Zebu, a breed imported from India in the 19th century. The Nelore breed has thrived in Brazil because it tolerates the heat, humidity and insects of the country's interior better than other cattle.

 

But the Nelore is smaller than other breeds and takes longer to mature. That's where breeding has helped. By crossing the strongest and most fertile cattle, offspring grow bigger and mature faster. The improvements have enabled ranchers to lower the cost of raising each animal and thereby expand their herds.

 

Brazil now boasts some 195 million cattle -- just more than one for every Brazilian.

 

Despite the enhancements to date, critics question whether further improvements can be extracted from the same gene pool. Indeed, some scientists argue the current prices of pedigrees are fueled less by genetics than an aesthetic fad among cash-rich ranchers.

 

A BEAUTY PAGEANT

 

''The high prices are based on the salability of each animal, not a promise of further genetic superiority,'' says Reuben Mapletoft, a leading scholar on cattle reproduction at Canada's University of Saskatchewan. "It's a beauty pageant.''

 

But many ranchers still value that beauty.

 

Ricardo Costa Martins Amatuzzi, a rancher in the southern state of Matto Grosso do Sul, first purchased a group of pedigree cattle and embryos in 2001. In November, he and a business partner -- their brand, Neozebu, emblazoned across their caps -- scrutinized more animals at a Nelore fair in Campo Grande, the capital of the state and one of the centers of Brazil's cattle industry.

 

''Our herd could still get stronger,'' he says. "Pedigrees are changing our business.''