Brazil’s 2024 Beef Market: High Exports, China Affects Revenue

In January 2024, live cattle prices in Brazil averaged around R$ 250 per arroba, with the Cepea/B3 indicator decreasing slightly by 0.48%.

Researchers from the Center for Advanced Studies in Applied Economics (Cepea) note uncertainty in the sector regarding supply due to climatic issues.

Meanwhile, domestic demand continues at a stable pace, and exports are on the rise.

Data from the Secretariat of Foreign Trade (Secex) shows that in the first two weeks of January, Brazil exported 86,833 tons of fresh beef, averaging 9,648 tons per day.

This volume is almost 25% higher than the average of 7,281 tons per day in January of the previous year, indicating a potential new monthly record.

Fernando Iglesias, an analyst at Safras & Mercado, points out that while the Cepea indicator is at R$ 250, transactions reached a maximum of R$ 245 per arroba.

He explains that during this period, slaughterhouses faced challenges in meat sales due to market seasonality and consumers’ financial constraints, leading to a preference for more affordable food like chicken, eggs, and sausages.

Supply remains limited, with ranchers pacing their business activities as pasture conditions allow. Slaughterhouses engage in transactions as needs arise.

Brazilian beef exports potentially setting new records

Iglesias predicts that 2024 will be a historic year for Brazilian beef exports, potentially setting new records.

However, he highlights a crucial point regarding the prices paid by importers. The ton is traded for around US$ 4,500, a price that does not fully compensate the industry.

This situation is partly due to China’s cooled economy and an oversupply of pork, with the Chinese government working to make the sector profitable again.

In 2023, Brazilian beef exports totaled 2.536 million tons, an 8.15% increase from the previous year.

However, there was a 17.15% drop in total revenue, amounting to US$ 10.845 billion, according to the Brazilian Association of Refrigerators (Abrafrigo).

Twelve months ago, China paid US$ 6,288.50 per ton for Brazilian beef, nearly 30% higher than the current rate.

Despite a record year, there is an expectation of lower revenue in 2024 due to these price drops.