June 9, 2011

Brazil meat prices to rise in third quarter

The start of the bovine off-season has come to a relatively weak market in short-term comparisons.

The lower supply would cause stock prices to increase in the coming months, especially in the third quarter. In May, volumes shipped were low, and fell compared to April by 18%, 9.6%, and 24% in cattle, poultry, and pigs, respectively. This fall more than offset the relative decline in slaughtering, boosting the domestic availability.

Meat prices retracted by 3.4%, 3.6%, and 9% for cattle, poultry, and pigs, respectively in the month compared to April. Despite this decline, prices are at levels above those recorded in May 2010, up 25% in beef and 15.2% in chicken. The exception is pork, which prices retracted by 17.2% in year-on-year terms.

The price scenario partially draws upon the possibility of some recovery in the export volumes, plus the beginning of the cattle off-season. Moreover, the possible reopening of the Russian market and initial negotiations with Asian countries, as well as the estimated recovery of the global economy, explain the relatively optimistic framework for shipments in the industry.