December 8, 2008

Brazilian meatpackers seen at 55 percent capacity in 2009

Beef abattoirs in Brazil are expected to operate at around 55 percent capacity in 2009, slaughtering close to 40 million cattle of their 70 million head capacity.

This projection is based on the high likelihood of low cattle supply next year, in addition to the recent credit crisis and economic downturn which have slowed beef demand.

Mid and small sized companies are severely affected by purchasing dearer cattle in the market as opposed to large companies which are increasingly sourcing cattle from their own farms or feedlots. Some larger meatpackers such as Bertin, JBS-Friboi and Minerva have temporarily suspended operations in some of their plants.

Bertin, a company that was planning to create a bank with the focus of providing credit to its suppliers (following in the steps of JBS-Friboi), has postponed the project as a result of the recent financial and operational adjustments due to the financial crisis.

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