Cepea, March 18, 2020 – CATTLE – Calf prices (Nellore, 8 – 12 months old) have been on the rise since September 2018 in many of the regions surveyed by Cepea. In São Paulo, a calf has been worth more than 1,900.00 BRL since early March/2020, the highest real level in all Cepea series, which started in 1994 for this product – values were deflated by the IGP-DI.
In the first fortnight of March, the average calf price in São Paulo State was 1,913.29 BRL, also the highest in the series, surpassing the previous real record, at 1,849.55 BRL hit in May 2015. In Mato Grosso do Sul, the average calf price in the first half of the month was 1,772.35 BRL, the highest, in real terms, since June 2015 – the previous record in this state, at 1,875.06 BRL, was hit in May 2015 too.
The boost came from both low animal supply and higher demand. Prices are usually higher between March and May, since, in that period, beef finishers need more calves to replenish the fed cattle that are sent to slaughter at this time of the year.
However, in the first quarter of 2020, the number of weaning calves is lower, since the number of cows in the Brazilian herd decreased in the last years. Thus, supply has been low, while demand has been firm, due to the optimism of backgrounding cattle farmers about fed cattle quotes, which are currently high. It is worth to mention that fed cattle arroba was traded at 230.00 BRL in late November – currently, prices have been around 200.00 BRL.
FED CATTLE – Fed cattle prices have been practically stable in most of the regions surveyed by Cepea. In São Paulo, the CEPEA/B3 Index for fed cattle closed at 204.70 BRL (42.19 USD) on March 13, 1.4% up in the fortnight. In general, the supply of animals ready for slaughter continues low, and demand is not increasing much.
EXPORTS – The lower number of working days in February added to the carnival season in Brazil (Feb. 22 – 26) resulted in lower beef exports during the month. Still, the total volume shipped continued higher than 100 thousand tons, scenario that has been observed for 20 months.
According to data from Secex, in February, Brazil exported 110.58 thousand tons of beef, 5.5% less than the volume shipped in January and 4.22% below that exported in Feb/19. Considering the daily average of shipments, in February, it was at 6.14 thousand tons, against 5.31 thousand tons in January and 5.77 thousand tons in Feb/19 – meaning that, last month, exports were 15.51% higher than in January, 6.42% higher than in Feb/19 and that Brazilian beef sales to the international market continue firm.
HOG – Live hog prices increased in the first fortnight of March in all the regions surveyed by Cepea. In general, this valuation was linked to the price rises of the major inputs consumed in the activity (corn and soybean meal) and the lower availability of animals within the ideal weight for slaughter.
In the SP-5 region (Bragança Paulista, Campinas, Piracicaba, São Paulo and Sorocaba), live hog quotes closed at 5.84 BRL on March 13, 3.2% up compared to that on Feb. 28. As regards the pork meat traded in the wholesale market of the Greater São Paulo, price rises were not as sharp. Common and special pork carcass traded in that region in the first fortnight of March rose 1.3% and 3.9%, respectively, to 8.30 BRL and 8.68 BRL per kilo on March 13.
EXPORTS – The Brazilian exports of pork meat decreased slightly from January to February, due to the lower number of working days last month. Still, sales to the international market had a good performance, scenario that has been observed since mid-2019. In general, exports were boosted by purchases from China, which remains the top importer of the Brazilian pork meat – in February, China’s share in the total amount exported by Brazil increased.
According to Secex, Brazil exported 65.3 thousand tons of pork meat (in natura and processed) last month, 3.9% less than in January, but 22.6% more than in February 2019. Revenue from shipments, in turn, was favored by the strong dollar, totaling 658.03 million BRL, 3.1% lower than that in the previous month, but much higher (78.1%) than that received in February 2019.
China purchased 31.1 thousand tons of the Brazilian pork meat last month, accounting for 47.6% of all the pork Brazil exported in the period. Compared to January, China’s share in the total Brazilian pork exports increased 2.5 percentage points, and compared to February 2019, a staggering 25.3 percentage points. The sanitary issues currently faced by China have lowered their domestic supply, increasing purchases in the international market, mainly from Brazil.
POULTRY – The trading pace stepped up in the wholesale market of chicken meat in the first fortnight of March – this scenario was observed in most of the regions surveyed by Cepea. Higher liquidity is linked to the demand increase in the Brazilian market as well as the fast exports pace. As a result, chicken meat prices increased.
EXPORTS – The Brazilian exports of chicken meat (in natura and processed) increased in February to the highest volume for the month since the beginning of Secex series, in 1997. This increase surprised agents from the market, since China’s purchases decreased in that period and February has less working days than the other months of the year – which could result in lower exports.
According to data from Secex, in February, Brazil exported 348.4 thousand tons of chicken meat, 7.6% more than in January and a staggering 9.9% up compared to Feb/19 – which, until last month, held the previous record for the month. Revenue, in turn, totaled nearly 2.4 billion BRL in February, favored by the strong US dollar, 9.6% higher than that from January and 23% above that from Feb/19.