Cepea, February 2, 2021
CATTLE – Values of calf and fed cattle continued to move up in early 2021. As a result, monthly price averages set new real records in their respective series.
Concerning calf, quotes rose because of the increase of the slaughter of female animals from 2018 to 2019 and the significant demand for calf and lean cattle, due to the firm international demand for Brazilian beef in 2020.
In January, the ESALQ/BM&FBOVESPA calf price Index – Mato Grosso do Sul state (one of the most important trading areas in Brazil) averaged 2,604.45 BRL, the highest monthly price for the fourth consecutive month, and 33% above that registered in January 2020, in real terms (deflated by IGP-DI December 2020).
Data from IBGE indicate that, from the total animals slaughtered in the first quarter of 2018 in Brazil, 46.56% were female (heifer and cow) and, in the same period of 2019, 46.45%. From January to March 2020, this number decreased to 42.57%. In the partial of 2020 (up to September – most recent data available), the slaughter of female animals accounted for 38.68% of the total. In spite of the decrease in the year, this trend was not enough to adjust supply in the short-term, since the demand for calf and lean cattle was more intense due to consecutive price rises for fed cattle.
As for fed cattle, (CEPEA/B3 Index, São Paulo state), the average in January was 289.01 BRL, upping 8.6% compared to December/20 and 21.9% in relation to January/20, also in real terms.
EXPORTS – In natura beef shipments finished the third week of January at a slower pace. Data from Secex indicate that 85.065 thousand tons of the product were exported, with a daily average of 5.67 thousand tons. Therefore, international trades may total 113.42 thousand tons up to late January, the smaller amount since February last year.
HOG – The typical demand (domestic and international) decrease for pork at the beginning of the year pressed down carcass values, mainly in the second fortnight of January. Due to price drops, pork carcass quotes were far from beef carcass values, but close to chicken prices. As a result, the competitiveness of pork has been increasing compared to these competitors.
In January, special pork carcass prices averaged 10.70 BRL/kilo, 4% down compared to the month before. Players already expected price drops, because the first month of the year is historically characterized by low liquidity. This scenario, however, still concerned slaughterhouses and producers, who operate with higher supply of animals and pork than the demand.
In the beef market, in light of firm exports and low supply of ready-to-slaughter animals, beef carcass prices were increasing, being close to the nominal record, registered in November/20.
As for broiler, the slow pace of trades, which has been observed since late December, led players to operate with high supply of the meat, resulting in stocks and pressing down quotes.
POULTRY – The low liquidity in the poultry sector, for chicken meat, live animals and chicks, pressed quotes consecutively in January. However, despite price drops, most products of the sector surveyed by Cepea were still being traded at higher values compared to those registered in January 2020, in real terms.
As for chicken meat, although competitiveness compared to other meats (beef and pork) was high in late January, domestic sales moved at slow pace during the month. Traditionally, the purchase power of the population reduces in January, limiting the consumption. In addition to the domestic demand, exports also decreased in January, pushing up inventories at the industry.
Concerning chicken meat cuts, the downward trend prevailed for many products surveyed by Cepea, especially the most traditional ones. The exception was chicken heart, whose prices were soaring – the monthly average was a nominal record. Players surveyed by Cepea say that the domestic availability of this product is low.
Due to the weak demand for meat from end consumers and high stocks at the industry, the search for new batches of live chicken has also shrank, pressing down quotes. As a result, the sequence of seven consecutive months of price rises was interrupted at the end of January.