Cepea, May 18, 2021
CATTLE – While fed cattle prices dropped slightly in the first fortnight of May, beef prices (considering beef carcass sold in the wholesale market of the Greater São Paulo) remained firm. These movements resulted in similar valuations for fed cattle and beef carcass this year, by 7.4% and 6.9%, respectively.
The supply of animals ready for slaughter continues low in Brazil, and the beginning of the dry season should reduce availability even more. However, many agents from slaughterhouses are putting pressure on farmers for lower prices. In the wholesale market, despite the weak demand for meat because of the current economic scenario and the lower purchase power of the Brazilian population, low supply is underpinning beef prices. The good exports performance is also helping to reduce the domestic availability of beef.
In the first fortnight of May, the average price for fed cattle in São Paulo (CEPEA/B3 Index, cash price) closed at 310.59 BRL, 1.7% down from that in April. This year, the CEPEA/B3 Index has increased by 7.4%.
As regards beef carcass, the average price in the first half of May closed at 20.29 BRL/kg (304.35 BRL per arroba), stable compared to that in April. This year, beef prices have increased by 6.9%, slightly less than the average price for fed cattle arroba.
The devaluation of fed cattle arroba between April and May and the price stability of beef carcass narrowed the price gap between these products.
Data from Cepea show that, in the first fortnight of May, the average price for fed cattle arroba was 6.24 Reais higher than that for beef, against 11 Reais/@ in April. It is important to mention that, in March, this price gap hit 14.3 Reais – with fed cattle more expensive than beef –, reflecting the sharp valuation of animals for slaughter.
HOG – Competitiveness of pork meat decreases in the Brazilian market
Different from the expected by agents in the Brazilian swine sector, prices for pork meat and live hog dropped in Brazil in the first fortnight of May. Despite Mothers’ Day and the payment of workers’ wages early in the month, meat sales have been weak in the Brazilian market.
As regards live hog, despite the fast exports pace for pork meat, liquidity has been low in Brazil, the major destination for the national production, limiting the demand for animals for slaughter.
According to Cepea collaborators, shipments of pork carcass from southern Brazil to São Paulo and Minas Gerais were higher in that period, as usual when the trading pace is slow in the Brazilian market.
Despite the slight devaluation of pork meat in the first fortnight of May, the average price in that period (May 3 – 14) was higher than that in April. This valuation is higher than that observed for beef and chicken meat, which reduced the competitiveness of pork meat against the other two. Between May 3 and 14, the average price for special pork carcass closed at 11.09 BRL/kg, 5.7% higher than that in April.
POULTRY/CEPEA: High demand boosts prices of all products in the poultry chain
The trading pace for chicken meat was fast in the first fortnight of May in the Brazilian market and for exports. This scenario allowed agents to increasing asking prices, in an attempt of passing on the high production costs to the protein. Thus, prices of all products in the poultry chain increased, from one-day-old chicks to live chicken, cuts and giblets.
In the Brazilian market, chicken meat sales were favored by its high competitiveness against beef and pork meat. It is worth to mention that the current low purchase power of the population in Brazil increases the demand for chicken meat, which is the cheapest one among the three of them.
As regards exports, according to data from Secex (Foreign Trade Secretariat), Brazil exported 22.8 thousand tons of chicken meat per day in the first week of May, 25.5% up from the daily average in April.
Despite the high volume exported, agents from the poultry sector are worried, due to the recent news reporting the suspension of 11 slaughterhouses authorized to export chicken meat to Saudi Arabia. In the first four months of 2021, this country was the number two destination for the Brazilian chicken meat, having purchased 159.9 thousand tons of the product, 11.2% of total shipments.