Cepea, January 7, 2020 – CATTLE – Players in the cattle farming sector may remember 2019 for a long time. After slight price oscillations in the first semester, quotes for fed cattle and beef started to move up in the second part of the year, moving up significantly in November, when they hit records in real terms. In December, values weakened, but were still at high levels.
In 2019, the sector gained even more importance in the international scenario and in market niches. New slaughterhouses were allowed to export meat to China, major destination of the Brazilian product. According to data from Secex, beef exports were higher than 100 thousand tons throughout the year, hitting records of volume and revenue. The domestic demand was weak in most part of the year because of the low purchase power of Brazilians and, because of that, exports ended up helping to flow the production and to underpin quotes of fed cattle and beef in the domestic market.
In São Paulo, fed cattle quotes registered two of the most significant daily increases, considering the ESALQ/B3 Index. On Nov. 5, prices rose 5.05% and, on Nov. 21, 11.85%, which led the Index to soar 35.53% in the month. On November 29, the Index hit 231.35 BRL, the highest of Cepea series, started in 1994, in real terms. Concerning beef traded in the wholesale market of the Greater São Paulo, quotes rose 35.01%, and the real record of Cepea series (since 2001) was registered on Nov. 28, at 16.46 BRL per kilo.
EXPORTS – Form January to November 2019, Brazil shipped 1.384 million tons of beef, higher compared to the amount exported in the entire year of 2018. The revenue in the partial of 2019 is 2.22 billion BRL, 7.5% more compared to that registered from January to December 2018.
HOG – The swine sector has registered a recovery this year, after facing losses in 2018. Prices for the live animal, meat and cuts soared in 2019, hitting nominal records, and annual increases surpassed 30% in all regions surveyed by Cepea.
The boost came from the higher international demand throughout the year, mainly because of African Swine Fever (ASF) cases in Asia, which have reduced the global pork supply. In late 2019, the demand increase in Brazil reinforced the bullish trend. Players in the wholesale market increased purchases to build stocks, and, besides, beef prices were at high levels, which encouraged consumers to buy other meats with more competitive prices, such as pork. As a result, the supply of ready-to-slaughter animals had been lower compared to the high demand.
Due to higher liquidity and prices, farmers increased negotiations, which reduced the average carcass weight in the first nine months of this year compared to the same period of 2018, closing 2019 at 89 kilos in the Brazilian average, according to IBGE.
Although prices of corn and soybean meal moved up sharply, in 2019, the purchase power of swine farmers in São Paulo and the west of Santa Catarina State against these inputs increased, given that quotes of live pig had risen more significantly.
POULTRY– The poultry sector had a good 2019, better than the previous, when it faced high costs, limited exports and low prices for live animals and chicken meat.
In 2019, shipments were firm, but still below expected. Therefore, the domestic demand underpinned quotes during the year, especially at the end of the period, when high price levels of beef pushed up the demand for other meats, such as broiler.
The good performance, however, was limited by high prices of most important inputs used in the activity, corn and soybean meal, mainly in the second semester. Because of that, producers in São Paulo have accumulated, in December, eight consecutive months of decreases in the purchase power compared to soybean meal and four months in relation to corn.