Cepea, September 2nd, 2021
CATTLE – Prices for slaughter cattle and beef carcass (sold in the wholesale market of the Greater São Paulo) remained stable in August, while beef export values continued to rise, which has been observed since early 2021. In this scenario, the price gap between beef sold in the Brazilian market and exported widened last month.
In the market of São Paulo State, the average of the CEPEA/B3 Index for fed cattle closed at 315.18 BRL in August, 1.08% down from that in July/21.
As regards beef carcass, the average price in August closed at 20.04 BRL/kg, cash, 0.8% lower than that in July.
Despite the low supply of slaughter cattle and the fast exports pace for the Brazilian beef, low consumption of this product in the domestic market constrained valuations. Besides the current high price levels, the income of most Brazilian people is weak, majorly because of the high unemployment rate and the inflation, which has been limiting the demand for beef. Also, chicken and pork meat are usually cheaper, disfavoring beef consumption.
As regards exports, according to data from Secex, in August, the average export price for the Brazilian beef closed at 29.81 BRL/kg, higher than that in July/21. The valuation of the Brazilian export beef is largely linked to the high demand for the national product and low supply in other important beef suppliers, such as Australia and Argentina.
Thus, the price gap between the beef sold in the wholesale market of SP and that for export closed at 9.77 Reais/kg in August, the widest since May 2020, when it closed the month at 11.15 Reais/kg.
SWINE: Competitiveness of pork meat increases against chicken meat, but decreases against beef
Liquidity was high and the prices for pork and chicken meat increased in the wholesale market of the Greater São Paulo in August. On the other hand, beef prices faded. In this context, the average price for pork carcass neared the values of the other two, which reduced its competitiveness against beef, but increased it against chicken meat.
In the Greater São Paulo, the demand for slaughter pig and pork carcass was high in the first fortnight of the month, pushing up prices. Despite the slight weakening in the second half of August, the monthly average price for pork carcass was higher than that in July.
In the poultry market, the upward trend of values was underpinned by the higher demand (domestic and international) for chicken meat. The current low purchase power of most people in Brazil leads many consumers to search for cheaper products, such as chicken meat.
On the other hand, for beef, the current high prices are discouraging the consumption of this product. Thus, slight devaluations were observed in Brazil in August.
INPUTS – The prices for corn and soybean meal increased in August, however, for live pig, prices rose even higher, pushing up the purchase power of independent pig farmers against these important inputs. On the other hand, in the annual comparison, the purchase power of Brazilian pig farmers is currently lower.
POULTRY: Farmers’ purchase power increases in August; meat loses competitiveness
High liquidity in the Brazilian market of chicken meat favored price rises in the poultry sector in August. For live chicken, valuations boosted the purchase power of poultry farmers against the major feed inputs: corn and soybean meal.
In the market of live chicken, high demand for chicken meat, from both the domestic and the international markets, led sellers to increase asking prices, in an attempt to ensure profit margins, since production costs have been high. In São Paulo State, the average price for live chicken in August closed at 5.94 BRL/kg, 3.2% higher than that in July.
CHICKEN MEAT – As chicken meat prices rose sharply in the Brazilian market, even setting nominal records, the product lost competitiveness against its major competitors: beef and pork meat. Competitiveness decreased for the second consecutive month in August, and the price gap between whole chicken and beef carcass during the month was the narrowest in the last eight months. Compared to special pork carcass, the price gap in August was the narrowest in the last two years.