August 17, 2007

Brazil beef exports fall on steer supply shortage

Brazil's July fresh and frozen beef exports fell to their lowest monthly level for 2007 to 97,474 tonnes slaughterweight (swt), due to tight steer supply and low processing activity on high livestock prices.

The appreciating Brazilian real was also a factor on decreasing meatpacker margins. Despite the drop, exports of fresh and frozen beef during the first seven months of 2007 have increased 22 percent over the same period in 2006, with Russia the main destination.

The high cattle prices in Rio Grande do Sul (RS) are a result of the displacement of cattle production by other agricultural crops such as soybeans, strong export and domestic demand, and the cold weather conditions which have affected pasture and forage supply. Since May, RS has been the only state with a foot and mouth disease free without vaccination status in Brazil, and is the only one with access to Chile, among other markets such as Russia and EU.