July 30, 2010

 

Brazilian cattle prices hit new highs on tight supplies

Brazilian grown cattle prices have reached the highest level for the last 18 months, mainly as a result of the current low supplies and the improvement in both domestic and export demand.

 

Brazil is currently undergoing a period of low seasonal cattle turnoff. During June to October (the off season), grass fed cattle supplies are scarce due to the low winter pasture availability, while feedlots supply animals mainly during October to December.

 

In addition, the rise in prices has been influenced by stronger export demand, with shipments in June the highest since September 2008, at 96,403 tonnes swt. The jump in exports was supported by demand from Russia, the Middle East and South-east Asia.

 

Grown steer prices are expected to maintain their higher levels in the second half of 2010, despite a possible increase in supplies during spring once feedlot output reaches the market. Low inventories in major Brazilian cattle raising areas such as Mato Grosso state, high restocker cattle prices and sustained demand are likely to underpin the higher prices.