July 13, 2009
Brazil cattle herd rebuilding to continue; prices up
The Brazilian cattle herd rebuilding is expected to continue this year, up two percent on 2008, totalling 173 million head.
The rebound follows the herd contraction from 2005 to 2007, the consequence of strong competition for land from cropping and strong cattle prices.
The larger herd is due to higher cattle prices and lower crop returns observed since 2007. Cattle prices increased 58 percent in 2008, turning the industry into a more profitable investment alternative. However, prices are forecast to decrease two percent in 2009, due to the current volatility in agricultural markets, reduced international demand and the recovering cattle supply, which is not expected to fully recover until at least 2010.
According to the Brazilian Exporters Association (ABIEC), cattle raising continues to be largely extensive with an average load rate of 1.15 head per hectare on generally low quality pasture land.
ABIEC predicts that with appropriate investment in genetics, pastures and supplementary feeding systems, load rates can be increased to 1.5 head per hectare within 10 years, decreasing the total land used for cattle raising and recovering degraded land in the Amazon region.
