January 21, 2014

Brazil's cattle, beef market to see high demands and rising prices in 2014 

Brazil's cattle market has begun 2014 in a more positive context, with expectations of high domestic and international demands leading to possible price increases, according to the Center for Advanced Studies on Applied Economics (CEPEA).

However, uncertainties concerning macroeconomic aspects have caused agents to operate cautiously in regards to new investments in the long-run.

The FIFA World Cup tournament in Brazil this year may also push local consumption of beef, which will boost further with tourist visitations. As for exports, forecasts that dollar quotes will be, at least, at current levels and the opening of new markets might increase prices in 2014.

Perspectives of firm prices in 2014 may help to encourage investments in feedlots. However, the scenario for supply this year remains unknown. The volume of female animals has been dropping, which might limit the volume of animals ready for slaughter in the mid and long-term.

According to Focus-BC reports, dollar quotes estimates at US$1.02 in 2014 are positive for Brazilian beef shipments. Abiec (Brazilian Association of Meat Exporters Industry) indicates that beef exports may increase and generate US$8 billion revenue, which is 20% more compared to 2013.

Concerning the opening of new markets, the key nations are China, Iran and Saudi Arabia. A better situation is expected for Europe and the US, which might also push up the economic growth of India.

In the swine sector, players expect a better performance this year with support from firm prices. Like beef, pork is likely to see a growth in demand due to efforts to encourage pork consumption in Brazil and tourists visiting the country for the World Cup. Players are also optimistic about exportation, given the improved relationship between Brazil and Japan and rising shipments to other markets.

Pork supply is expected to remain stable in 2014.

Meanwhile, projections of strong domestic demand and growing exports in 2014 indicate another favorable year for Brazilian poultry sector which has recovered from a major crisis in 2013. In order to meet rising demands, both domestic and international, a higher chicken production is expected this year.