The best of the last years

The year of 2007 was very positive for the Brazilian livestock sector. After four years with higher costs of production over steer prices, 2007 was marked by record figures.

For the calf, the ESALQ/BM&F Index (Mato Grosso do Sul state) increased more than 33 percent in the accumulated of this year. Regarding the steer market, the restrict supply boosted prices during all the year, especially in the second semester. On August 1st, the ESALQ/BM&F Index (Sao Paulo state) averaged 63.31 reals or 33.50 dollars per arroba (15 kilos), the first of a sequence of records, in nominal terms. At the beginning of December, the Index reached 77.00 reals or 42.78 dollars per arroba.

In the wholesale market of Sao Paulo city, figures were also record in 2007. On Dec 5th, the steer carcass was traded at 4.67 reals or 2.59 dollars per kilo.

Besides the lower supply over the demand, slaughterhouses also faced difficulty to trade in the international market. The main reasons were the dollar depreciation and the negative impacts of the Foot and Mouth Disease (FMD) outbreak of Oct/05. Even though, exports kept increasing. From January to November this year, beef exports amounted to 1.2 million tons, volume 8 percent higher over the same period 2006, according to the Foreign Trade Secretariat (Secex). In dollar, the total exported was of 3.2 billion in the same period, value 14 percent superior to that obtained in the same period last year.

Regarding the hog and poultry markets, the scenario was also positive, however, the higher inputs values, especially of corn, limited growers' revenues.

From January to December this year, living hog prices received by farmers increased more than 42 percent in Real in Sao Paulo state, in real terms. In the wholesale market of Sao Paulo capital, the hog carcass valuated more than 35 percent in Real during the same period. Besides the lower supply, the better trades at the end of the year also boosted the domestic quotations.

In the poultry market, the production, exports and also the domestic volume available increased. Prices also moved up, reaching the highest levels of the history. From January to December, the frozen and chilled meat valuated more than 27 percent in Real in the wholesale market of Sao Paulo capital - the most important Brazilian consumer reference.

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