September 8, 2005
 

USDA: Brazil livestock and products annual report 2005

Although the Brazilian economy is projected to grow by 3.5 percent in 2006 with inflation under control, domestic demand for animal protein is estimated to increase at moderate rates.

Profit margins for both livestock producers and packers are expected to remain slim due to lower cattle prices, appreciation of the Brazilian currency, and higher production costs.

Cattle inventories continue to expand in Brazil in response to higher investments in animal genetics, and improved pasture and management practices stimulated by government credit programs.

Beef production is projected to increase by five percent in 2006, mostly driven by strong demand from the export market, as Brazil continues to benefit from the problems derived from animal disease outbreaks in some regions of the world.

Continued strong export demand combined with moderate growth in domestic consumption will likely increase pork production by 3 percent in 2006.

However, there are some constraints that may temper the projected increase in beef and pork production in the near future: the continued appreciation of the Brazilian currency, higher interest rates, uncertainties derived from the current political crisis which dropped consumer confidence and consumer high debt, lack of adequate financing for government sanitary and inspection programs, lower cattle prices, and projected lower economic growth in 2006 as compared to the current year.

For the full USDA repot, click here.