Exchange ratio is the worse in history to finishers

Cepea, April 16, 2021


CATTLE – Fed cattle quotes continued to move up in early April; however, continuous and significant price rises for calf concern beef finishers. Data from Cepea indicate that, in the partial of April, the exchange ratio between these animals is the most unfavorable to finishers, considering the historical series, which started in February 2000.


In April (up to April 13), 9.89 arrobas of fed cattle (SP) were worth a calf (Nellore – 8 to 12 months old) in Mato Grosso do Sul, increases of 5.72% compared to the month before and 5.74% higher than in April last year – figures considered monthly averages of the CEPEA/B3 Index for fed cattle and the ESALQ/BM&FBovespa Index for calf, both deflated by the IGP-DI March/21.


This total in April (9.89 arrobas were worth a calf) is the highest of the entire Cepea series. The previous record had been registered in May 2015, when 9.65 arrobas of fed cattle were worth a calf. It is important to mention that, in that period, calf prices were at high levels.


This month (until April 13), the average of the CEPEA/B3 Index for fed cattle (São Paulo State, cash price) was 317.27 BRL, 2.56% up from that in March 2021 and an increase of 21.8% compared to that in April 2020, in real terms. As regards calf, the ESALQ/BM&FBovespa Index (Nellore, from 8 to 12 months old, Mato Grosso do Sul) was 3,139.02 BRL/head, on average, moving up 8.43% against March and 30.6% in one year. Both averages are real records in the Cepea series.


Brazilian shipments of in natura beef registered a daily average of 6.35 thousand tons in the second week of April, according to data from Secex. If this pace continues, the amount may hit 160 thousand tons by the end of the month, 20% higher compared to the month before, an increase of 40% in relation to April 2020 and a record for the month.


HOG – Prices of live pig and pork in the wholesale market moved up significantly in the first fortnight of April, after decreasing consecutively throughout March. Concerning the live animal, price rises were registered in the independent market of all regions surveyed by Cepea. The higher demand for new batches from the industry explains the bullish scenario, after values became more attractive with decreases in March. Moreover, the demand for pork in the wholesale market also increased.


Another aspect that influenced the demand increase from the industry is the low pork supply in the domestic market, because of the good pace of shipments. After hitting a record in March due to an increase of sales to China, the pace remains intense in April.


As for pork, in addition to the firm demand at the beginning of the month, the lower price favored sales to end consumers, allowing players to readjust quotes.


POULTRY – Consecutive price increases for corn (the current level is a record of Cepea series) have been worsening the situation of poultry farmers. Data from Cepea indicate that the current purchase power against corn is the most unfavorable in 10 years. As for the soybean meal, recent price drops of this byproduct have allowed a recovery in the purchase power.


Considering the live chicken price average in São Paulo state and the ESALQ/BM&FBovespa Index (Campinas, SP) for corn, poultry farmers have been able to purchase only 2.93 kilos of the cereal by selling a kilo of chicken this month (up to April 14), downing 2.7% compared to March and the smallest volume since July 2011.


As for soybean meal, considering the product traded in the wholesale market of Campinas (SP), the purchase power of poultry farmers in SP has increased for the third month in a row. In April, farmers have been able to purchase 1.87 kilo of the byproduct by selling a kilo of chicken, 7.7% up in relation to the month before and the highest amount over the last seven months.




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