July 4, 2011

Brazilian beef exports expected to rise while domestic consumption falls

Brazilian beef exports for both fresh and processed beef are estimated to increase 16% in 2011 to 1.8 million tonnes cwt, according to Informa Economics FNP's Anualpec 2011.

This forecast differs from that of the Brazilian Exporters Association (ABIEC), which expected total exports to fall 10% in volume, and increase 10-15% in value, reflecting rising cattle prices in Brazil and higher global beef prices.

However, for the first five months of 2011, total Brazilian beef exports were back 16% on-year, at 329,362 tonnes swt.

While both sources agree on higher beef prices in Brazil for 2011 due to tight supplies, a strong currency, and competition from other suppliers, they highlight the conflicting outlook for export markets, largely due to questions regarding demand and volumes to both Russia and the Middle East.

According to Informa Economics FNP, the surge in total beef exports for 2011 will be influenced by an 8.4% decline in domestic beef consumption, to 5.7 million tonnes cwt, with total beef production estimated to fall 3.5% on-year, to 7.5 million tonnes cwt.

Brazilian per capita beef consumption is expected to fall from 33 kilogrammes/person per annum to 30 kilogrammes in 2011, driven by higher beef prices and a switch to lower priced proteins, primarily poultry and pork.

Average livestock prices are expected to reach a record high in 2011, rising 27% on-year, to US$2.08/kilogramme lwt.

Due to higher exports and falling production, Brazilian beef exports as a percentage of total beef and veal production are expected to rise to 24% in 2011, up from 20% in 2010.