February 10, 2015

Brazil's cattle sector has room for more improvement, says Rabobank

Brazil's cattle industry must undertake major improvements particularly in the aspects of breeding, nutrition and transportation in order to further boost the country's beef output, agricultural lender Rabobank said.

The country's current beef production was described as "below-average" by world standards.  

To initiate critical changes, an investment of up to US$500 million would be needed, Rabobank said.

For the next decade, Brazil has to push higher the rate of its beef production as the country copes with rising international demand as well as the weak growth of the US beef herd.

Feedlot capacity for the world's leading beef producer and exporter should expand to 4.5 million head within the period, according to the Rabobank report, which was prepared by its Food & Agribusiness Research group.

Rabobank analyst Renato Rasmussen believes that Brazil can meet global demands, especially from developing nations, as the local beef and cattle sector is supported by the country's burgeoning productions of corn and soybean, key ingredients of animal feed.

On another positive note, Brazil beats the US in terms of herd numbers. Compared with the US' average cowherd size of about 30 head, Brazil's commercial cow industry is dominated by multi-thousand head herds, said Don Close, Rabobank's chief cattle economist.

There is also a shift in the cattle industry where Brazilian producers are moving to the more efficient feedlot system of rearing animals instead of grazing them.