December 17, 2009

Brazil needs new markets for its cattle

A combination of lower margins from cattle prices and high input costs resulted in a decrease in Brazil's marketing forecast for 2010.

In addition to the widening gap between input and grown steer prices, the Brazilian Lotfeeders' Association (ASSOCON) estimates the rising Brazilian real will continue to encourage processors to place downward pressure on finished cattle.

According to ASSOCON, the only way to solve these problems is to open new markets during the year, which will increase international demand for Brazilian product, counteracting 2009's product redirection to the domestic market.

However, the Food and Agriculture Organisation (FAO) has forecast that Brazilian beef exports will rebound in 2010, increasing 15% year-on-year as international beef prices rise, taking advantage of Brazil's improving cattle supplies.