Cepea, October 2, 2020 – The average prices for calf, lean cattle, fed cattle and beef in September hit new record levels in their respective series of Cepea. This scenario shows that firm demand, primarily from the international market, and the low supply of animals for slaughter continued to underpin quotes at high levels in the entire cattle chain.
Data surveyed by Cepea show that, although the average price for fed cattle (for slaughter) is at record levels, the current context does not favor the farmers who purchase calves and lean cattle, whose prices have also been at record levels (in real terms) in the Brazilian market.
For cow-calf farmers, the situation is similar, since, although prices of weaning calves are at record levels, expenses with inputs have also been high. The products that are imported have been more expensive to Brazilian farmers because of the strong dollar, and for the major feed inputs (corn and soybean meal), quotes have been at record levels too, in nominal terms. It is worth to mention that, in this case, the dry weather increases the needs for supplementing their diet with corn and soybean meal, due to the worse conditions of pastures.
In the Brazilian market of beef, prices for beef carcass are currently at record levels, which brings some relief to the national slaughterhouses that sell only to the domestic market, since cattle prices are also at record levels (in real terms).
CALF – In September (until Sept. 29), the average ESALQ/BM&FBovespa Index for calf (Mato Grosso do Sul) closed at 2,164.19 BRL per animal, 3.4% higher than that in August and a real record (values were deflated by the IGP-DI from August/2020). In São Paulo, calf prices are at record levels too, averaging 2,232.21 BRL/animal in September, 4.5% higher than that in August/20.
LEAN CATTLE – The average price for lean cattle in São Paulo in September (until Sept. 29) closed at 3,352.85 BRL, a real record, 7.3% higher in the monthly comparison and 39.3% higher in the annual comparison.
FED CATTLE – The monthly average for the CEPEA/B3 Index for fed cattle (São Paulo State, cash price) hit a new real record in the series of Cepea in September. Between Sept. 1st and 30, the Index averaged 248.49 BRL, 8.7% higher than that in August.
However, considering daily prices, the Index closed at 256.70 BRL (45.69 USD) on Sept. 30, a new nominal record. Taking inflation into consideration, the current price level is lower than that registered in November last year, at 261.25 BRL in reals terms (231.25 BRL in nominal terms).
HOG – Prices for live hog, pork carcass and cuts increased in the Brazilian market in September. Thus, in some of the regions surveyed by Cepea, the monthly averages (until Sept. 29) hit new real records (the series of Cepea were deflated by the IGP-DI for live hog and by the IPCA for pork meat, both from August/20).
It is worth to mention that prices have been on the rise in the Brazilian swine sector for four months, due to the low supply of animals within the ideal weight for slaughter and the fast exports pace for the national product.
As for the special pork carcass traded in the wholesale market of the Greater São Paulo, the average price rose by 12.2% from August to September, to 11.68 BRL/kg last month, the highest real level in the series of Cepea. Besides the carcass, the prices of some pork cuts also hit records, such as pork ribs, whose quotes averaged 16.22 BRL/kg in São Paulo State in September, 4.7% higher than that in August.
POULTRY – The fast sales pace for chicken meat in both the Brazilian and the international markets continues to boost quotes in the poultry sector – prices have been on the rise since June. For some products and regions, values have hit nominal records in the series of Cepea, which started in 2004, but continue below the real records (considering inflation).
The price for whole chicken, frozen, marketed in the Greater São Paulo, averaged 5.60 BRL/kg in September, 13% higher than that in August and 30.4% up compared to that in September/2019, a new record, in nominal terms. In real terms, the average in September, of 5.72 BRL/kg, is the highest since Sept/2013, (prices were deflated by the IPCA from August/2020).
In Toledo (PR), the average rose by 11.7% in the monthly comparison and by 17% in the annual comparison, to 5.90 BRL/kg in September, the highest nominal level in the series of Cepea, but still lower than that in October 2008, in real terms (considering inflation).
For the chicken cuts traded in the Greater São Paulo, despite the upward trend of quotes in the entire sector, full wing prices weakened in September. Prices for this chicken cut were rising in Brazil because of the firm exports to China, but national consumers did not accept valuations, forcing agents to reduce quotes again.
In the market of live chicken, the demand from meat processors was firm in September, since slaughter has increased to meet the demands for chicken meat. This scenario added to lower production since March, when the covid-19 pandemic increased in Brazil, controlled the supply of chicken for slaughter, which has been pushing up quotes.
On the average of São Paulo State, live chicken prices averaged 4.00 BRL/kg in September 4.2% higher than in August and 18.1% up compared to that in Sept/19. This is also the highest nominal level in all the series of Cepea, which started in 2004 for this product. In real terms (values deflated by the IGP-DI from August/20), this is the highest level since December 2015.