Prices still moving down

Hog/Pork

In the last three months, Brazilian slaughterhouses that export pork meat saw a strong increase in their prices. Growers, in turn, are disappointed as prices reach their lowest values since July/2001 (in real terms).

In June, the export price of pork meat from Brazil was at record levels, at 2,186.10 dollar per ton, according to Secex. The price was only 0.1 percent superior to prices registered in May, but 16.6 percent higher to the January of the current year and 11.8 above those at June 2005. The international value of pork meat is related to a lower global supply.

Prices received by farmers for live hogs have been settled around 0.53 and 0.59 dollar per kilo in Sao Paulo state. Between January and June, the live hogs prices were reduced by 26.5 percent, in nominal terms.


Poultry

Brazilian poultry market finished the first semester of 2006 with slow exports. Exported volume accumulated up to now, reached.185 million of tons; 10 percent lower to that which prevailed during the same period in 2005.

Poultry meat was traded at 13.6 percent less than its value through the first six months of 2005, in dollar values. From January to June, 2006, meat exports devaluated 15.3 percent, in dollar and 17.7 percent in Real. A weaker global demand due to Influenza, has been the major explanation for this pattern.

In the wholesale market of Sao Paulo capital, the frozen poultry meat moves from 0.73 to 0.76 dollar per kilo, and the chilled one, from 0.53 to 0.59 dollar per kilo.


Cattle

Brazilian steer prices remain almost unchanged, around 49 reals or 22.50 per arroba (15 kilos), according to Esalq/BM&F Index based on Sao Paulo State (elaborated by Cepea). The main reasons for this relative stability are lower supply and the slaughterhouses' reluctance to buy, due to the slow pace of wholesale markets.

According to Secex, in June of 2006, Brazilian exports increased 0.86 percent in relation to May, totalizing 107.7 thousand tons. Prices in dollar, however, dropped 0.9 percent. Compared with June of 2005, the volume exported reduced 6.4 percent and the value in dollar per ton increased 16.3 percent.

The costs of beef production increased again in April and May, 2006. Prices, in turn, decreased in this same period, making things much worse for farmers. From January to May, the total costs of beef production increased 4.22 percent. The steer arroba dropped 6.4 percent in the same period - the average of 9 Brazilian states.

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