Brazil’s beef consumption drops to lowest level in 25 years as prices skyrocket

RIO DE JANEIRO, BRAZIL – In the first four months of the year, per capita beef consumption dropped by over 4% compared to 2020, according to CONAB estimates.

The Covid-19 pandemic brought changes to the tables of Brazilians, who cut beef consumption to its lowest level in 25 years, according to government data, which estimates domestic availability of the product by subtracting exported volume from national production.

While the population lost income, the prices of beef cuts skyrocketed, in the wake of record high prices for fat cattle, limiting domestic consumption, while China imports more meat from Brazil than ever before.

Now, each Brazilian consumes 26.4 kilos of this protein a year, a drop of almost 14% compared to 2019 – when there was still no health crisis. This is the lowest level since 1996, when the National Food Supply Company (CONAB) official records began.

In the first four months of this year, per capita beef consumption dropped by over 4% compared to 2020, according to CONAB estimates.

“The pandemic issue brought unemployment and loss of income,” said Guilherme Malafaia, a cattle researcher at EMBRAPA. “This impoverished the population and also led to a loss of purchasing power, thereby undermining the domestic consumption of the protein.”

The rise in beef led Brazilians to look for cheaper options, including chicken and pork. In addition, the consumption of eggs, which Brazil hardly exports, reached its highest level in 20 years.

While Brazil becomes poorer, a disease that wiped out much of China’s pig herd has reduced the supply of meat in that country, leading it to import more protein from elsewhere.

This has helped fuel global food inflation, which also plagues Brazil.

Sergio de Zen, agricultural policy director at CONAB, said that the whole world is paying more for food. He added that the weak currency punishes Brazil in particular, as the devalued exchange rate increases production costs here.

According to the IBGE (Brazilian Institute of Geography and Statistics), the price of meat in general increased 35% in the country in the 12 months to April, more than five times the IPCA (extended consumer price index) in the period.

In the case of the arroba (15-kg) of beef, the price increased more than 50% over the same period in 2020, currently operating at around R$305, just below the historical maximum recorded in 2021, according to CEPEA data.

Meatpackers are also struggling with a cyclical decrease in the supply of animals for slaughter.

Egg consumption

With the rise in meat prices, some families now eat more eggs. With an eye on this new clientele, there is greater demand for genetic material to produce eggs in small scale and sell them in large cities, says Marcelo Miele, EMBRAPA’s researcher for poultry and swine.

The price of eggs did not increase like chicken, whose rise was in line with food inflation; and much less than the price of pork, which rose well above foods due to an increase in exports to China, said Miele.

On the supply front, the rising price of meat in Brazil also reflects higher production costs.

For companies, the shortage of cattle for slaughter causes idleness in the industry which would be between 35% and 40%, estimates Malafaia, with consequences in the domestic supply. If companies are authorized to export, the preference is to slaughter and sell to clients like China, which pay in dollars and cover the costs, he said.

On the poultry and swine side, the villain is corn, which doubled in price over the past year and is the most important component of feed. But despite higher costs, chicken and pork producers managed to increase the internal availability of both types of protein.

There was a 5% increase in per capita pork consumption and 6% in chicken consumption in 2020, part of it driven by the emergency aid, Miele said, citing industry and IBGE data.

“With the pandemic, we thought there would be chain disruption issues,” Miele said referring to chicken and pork. “But from what appears in the per capita consumption statistics, this was not the case.”