The crisis observed throughout 2017 in the Brazilian beef market, which started with the operation “Weak Flesh” and the lenience agreement by JBS shareholders, caused a concern never observed in the global cattle farming scenario. If Brazil stops producing and/or trading beef, the world can face a collapse regarding consumption and inflation. The crisis in the Brazilian market has highlighted even more the fact that the Brazilian beef is not only strategic for both the sector and the economy, but is also extremely important for global food security.
Each one of major beef producers in the world, Australia, India, China, United States, Argentina, Uruguay and Paraguay, have difficulties and distinct characteristics. Australia, for instance, faces critical problems with dry weather every now and then, reducing the herd, pushing up animal prices and, consequently, beef quotes. It is important to mention that Australia exports 80% of its production, having great importance in the global market.
India, in turn, has health and religious problems with the herd. The slaughter prohibition of female animals in some regions of the country affects competitiveness, besides the lack of standardization and low quality of the herd.
China has an interesting herd; however, with extremely high costs and a deficit between production and consumption, which leads the country to be a net importer of beef. In this scenario, China (along with Hong Kong) was the destination for 40% of all in natura beef shipped by Brazil in 2017.
The United States, major competitor of Brazil, although one of the greatest producer in the world, are also big beef importers. The country sells the product at high prices and purchase cheaper meat (forequarter) for domestic consumption, mainly to produce burgers.
As for South America, although Argentina and Uruguay produce animals and beef with good quality, they have geographic and herd limitations, besides political problems, as in Argentina.
After the Brazilian cattle crisis is over, or at least mitigated, the country regained its place as great producer and beef supplier in world terms. Agribenchmark data indicate that Brazil has one of the lowest production costs compared to other 25 beef producing countries.
PRODUCTIVITY – Cepea data indicate an increase of the average productivity in Brazil, for both animals raised in pastures and in feedlots. As for calves, in early 2000, 100 cows occupied an area of 250 hectares, on average, and the weaning rate was 40%, producing a calf of around 170 kilos. Last year, however, still according to Cepea data, 100 cows occupied a smaller area (150 hectares) and produced heavier calves (between 200 and 210 kilos, on average). Besides, the weaning rate increased to 65%.
In spite of this advance, when these numbers are compared to other producing countries, it is observed that Brazil still has a long way of challenges ahead, but with several opportunities.