Cepea, April 2, 2020 – CATTLE – Amid so many uncertainties about both operation in the cattle chain and demand – domestic or international –, the Brazilian cattle market was unstable in March.
Prices for fed cattle arroba were firm early in the month, underpinned by the low supply of animals ready for slaughter. Thus, during all the first fortnight, the CEPEA/B3 Index for fed cattle was around 200.00 BRL, reaching 204.70 BRL on March 13.
At the beginning of the second half of the month, however, the spread of coronavirus in Brazil made agents from the market cautious about trades. These agents feared that the measures adopted by governments in order to stop the outbreak could hamper logistics in Brazil. In this context, operators were in and out of the market, trying to purchase and sell animals only when in urgent need. In that period, arroba prices dropped, and the Index closed at 187.40 BRL on March 18.
Late in the month, the scenario changed again. The increase in the demand from retailers (in the wholesale market) in order to supply supermarkets pushed up arroba prices again, which ended up offsetting the losses from mid-March. The demand for exports continued to encourage animal purchases at higher prices.
Besides, the low availability of fed cattle stopped farmers from asking lower prices, leading slaughterhouses to bid higher prices. Between February 28 and March 31, the CEPEA/B3 Index for fed cattle rose a slight 0.7%, closing at 203.15 BRL (39.10 USD) on Tuesday, 31.
HOG – The recommendation to avoid social contact as well as the quarantine decree (municipal and state) lowered the demand from restaurants, schools, hotels and other food services for meat. This scenario reduced the number of deals for live hog, pork meat and cuts in Brazil, sharply pressing down quotes for these products at the end of March.
However, on the average of the month, prices were higher than in February. In the Brazilian hog market, the supply of animals within the ideal weight for slaughter is low, while the demand for pork meat was firm in March.
Despite these valuations, prices for corn and soybean meal rose more sharply, reducing the purchase power of the hog farmers from São Paulo. The demand for these inputs continued higher than supply, mainly in SP, where corn prices hit the highest nominal levels in all Cepea series.
POULTRY – The recent halts due to the coronavirus outbreak worldwide reduced the demand for chicken meat in the Brazilian market in mid-March. Thus, agents from the sector lowered the prices asked for the product. According to Cepea collaborators, the suspension of classes weakened the demand for chicken meat, which is used in school meals.
It is worth to mention that these price drops interrupted the upward trend of quotes that had been observed in the sector since the second fortnight of February, which was underpinned by the increase in the demand from the market to build inventories. In the markets of chicken cuts and live chicken, the trend was the same.
In late March, the increase in the orders from markets fastened the sales pace in part of the Brazilian poultry sector. With the recommendations to avoid social contact and the quarantine decrees by several public bodies, chicken meat sales tend to be favored by consumers’ demand, since it is more competitive than beef and pork meat. Thus, agents from the sector claimed that sales were firm, despite the suspension of classes and the decrease in the demand from food services. In general, sales of frozen products were higher, since they have longer shelf life and are easier to stock