Brazil is one of the most important beef producers in the world, the result of decades of investment in technology that not only increased productivity but also the quality of the Brazilian product, making it competitive and reaching the market of more than 150 countries.
USDA data points to a 7.7% drop last year and a 4.6% increase for 2022
In its report released last January on the world trade in livestock and poultry, the USDA pointed to a strong retraction in Brazilian beef production last year and a new recovery in the course of 2022.
According to the USDA, Brazil produced about 9.325 million tons of beef in 2021, equivalent to the worst volume of the last five years and meaning an annual retraction of 7.7%.
The previous forecast for last year reached 9.500 million tons. However, with the reports pointed out by Brazil from September of the detection of atypical bovine spongiform encephalopathy (BSE), China temporarily restricted beef imports, bringing down Brazilian slaughter in the fourth quarter. This impacted by almost 2% less the volume that already had a strong retraction.
However, with the issue resolved, strong demand from China should help stimulate beef production in Brazil in 2022. Estimated production for the current year is 9.750 million tons, an annual increase of 4.6%. Even so, if indeed achieved, it would mean the second lowest volume in six years.
Total beef exports in 2021 (including fresh and processed products) showed a 7% drop in volume and a 9% growth in revenue compared to the 2020 movement, according to the Brazilian Meatpacking Association (Abrafrigo). The entity compiled the data from the Ministry of Economy’s Foreign Trade Secretariat.
According to Abrafrigo, the country handled 1,867,594 tons in 2021 compared to 2,016,223 tons in 2020, a record year for exports. Thanks to the product’s price hike in international markets, however, revenue rose from $8.485 billion in 2020 to $9.236 billion in 2021.
The total movement of beef in the last month of the year reached 151,593 tonnes, against 168,155 tonnes in 2020, down 10%, according to the entity.
The revenue obtained was US$ 726.6 million, against US$ 741.2 million in 2020, a reduction of 2%.
Although it reduced its imports from 1,182,673 tonnes in 2020 to 950,057 tonnes in 2021, China remains the biggest buyer of Brazilian beef, through the movement carried out by the city-state of Hong Kong and through purchases made by the mainland.
Abrafrigo reports that, last year, the United States became the second largest importer of the product, from acquisitions of 59,545 tons in 2020 to 148,177 tons in 2021, with an increase of 148.9% in handling. Chile remained in third position, going from 90,403 tonnes imported in 2020 to 110,626 tonnes in 2021 (+22.4%).
Even reducing its purchases by 42.5%, from 127,953 tonnes to 73,612 tonnes, Egypt ranked fourth. The United Arab Emirates increased its imports by 21.7%, from 40,861 tonnes in 2020 to 49,711 tonnes in 2021, ranking fifth. In sixth place, the Philippines went from 39,673 tonnes in 2020 to 46,349 tonnes in 2021 (+16.8%), while Saudi Arabia was seventh with a 0.5% drop in handling, which went from 41,067 tonnes in 2020. to 40,870 tons in 2021.
Cattle slaughter during the fourth quarter of 2021 stood at levels slightly above 3.31 million head, a similar amount (0.0%) to the values corresponding to the third quarter of 2021, when also slaughtered approximately 3.31 million bovines. Compared to the fourth quarter of 2020, when about 3.64 million heads had been slaughtered, cattle slaughter showed significant falls (-9.2%). Of the 334 thousand heads less slaughtered in relation to the fourth quarter of 2020: 192.3 thousand were steers and young bulls and 6.4 thousand bulls, to which must be added the decrease of 43 thousand cows and more than 92 thousand heifers in the task.
During the year 2021, bovine slaughter has been close to 13 million head, (-7.3%) below the values corresponding to the period January – December 2020, in which about 14 million head had been slaughtered. cattle. The significant decline observed in bovine slaughter, which is over a million heads, is explained by a drop in the slaughter of steers and heifers, of about 354 thousand heads, and of heifers, by about 400 thousand, which was accompanied by a lower slaughter of cows, less by about 257.5 thousand heads than the previous year, and also due to fewer bulls, about 14 thousand.
Throughout the fourth quarter of 2021, approximately 762.4 thousand tons of bone-in beef were produced; a slightly lower volume, (-1.5%), than that obtained during the third quarter of 2021, and, in addition, it was (-7.9%) lower than the volume of production processed during the fourth quarter of 2020, which had been close to 828 thousand tons. Comparing the volume of beef production in the fourth quarter of 2021 with that obtained throughout the same quarter of 2020, a year-on-year contraction of (-7.9%) is observed; in the same period of time, the fall registered in the number of slaughtered animals was (-9.2%). The improvement in the average weight of carcasses, which went from 227.2 to 230.4 kilograms, explains why production reacted 1.3 percentage points below the slaughter cut.
Beef production in the fourth quarter of 2021 showed slight falls in terms of its aggregate volume of production in relation to the third quarter of 2021, going from 774 thousand tons of bone-in beef equivalent to 762 thousand tons.
To round off this drop, 15.4 thousand tons less of steer and young bull meat were produced (-3.4%), 10.4 thousand tons less of beef (-8.0%); and 0.5 thousand tons less of bull meat (-3.2%); and in the opposite direction, 14.7 thousand tons more of heifer meat were produced, (+8.2%); leading to a quarterly drop in production of 11.6 thousand tons of beef, (-1.5%), comparing the fourth quarter of 2021 with the third quarter of the year.
When comparing the fourth quarter of 2021 with the same period in 2020, approximately 40.2 thousand tons less of steer meat and steers (-8.5%) were produced, 16.3 thousand tons less of heifer meat , (-7.7%); 7.1 thousand tons less of beef from cows (-5.6%), and 1.7 thousand tons less from beef from bulls, (-9.5%), resulting in a year-on-year drop in production close to 65, 2 thousand tons, (-7.9%), which went from about 828 thousand tons in the fourth quarter of 2020 to approximately 762 thousand tons in the fourth quarter of 2021.
Argentine exports of beef accumulated over the last year, from March 2021 to February 2022, were located in volumes close to 708 thousand tons of bovine beef equivalent and 84 thousand tons of bovine bones; for a value close to 2,884 million dollars. In February 2022, foreign sales of bovine meat and bones were at significantly higher levels (+21.7%) than last January; and, they were slightly higher, (+2.5%), than those of February 2021, considering the volumes shipped in product weight tons (offals and viscera are not included).
In summary, shipments of chilled, frozen cuts, and processed meat corresponding to the month of February 2022 totaled about 40,001 tons of bovine meat product weight and approximately 6.9 thousand tons of bovine bones, for a value of approximately 266, 6 million dollars. The average FOB price per ton for the period in question was approximately US$8,900 for chilled boneless cuts; and over $5,740 for boneless frozen cuts. These prices have been significantly higher, (+33.4%), than those registered during the second month of 2021 for chilled cuts; and they were (+39.7%) higher than those of February 2021 in the case of frozen cuts. The average price of February 2022 increases slightly compared to January, (+1.8%), and increases significantly compared to February 2021, (+37.8%).
The People’s Republic of China was the main destination, in volume, for Argentine beef during the first two months of 2022 with approximately 63.0 thousand tons, followed by Israel, 6.43 thousand tons, and then by Chile, 3, 93 thousand tons. In terms of the value of foreign currency received, the main market during the period was China, which represents 63.5% of the total exported value of chilled, frozen and processed beef in the period, followed by Israel (9. 4%), and Germany (6.9%).
If shipments are compared in the first two months of 2022 with those corresponding to the period January to February 2021, they showed a varied behavior in relation to the levels of activity that had been registered a year ago: United States, the Netherlands and Germany show significant growth.
China, Israel and Italy exhibit moderate negative variations; while Chile, Brazil and Russia show falls of great magnitude in the volumes of Argentine meat demanded. The dependence on the Chinese market for Argentine beef exports has become decisive, and in the last month of February 2022, there were 34.5 thousand tons, which represented approximately 73.6% of shipments. Israel, with 2.6 thousand tons, became the second most relevant destination, in terms of volumes, in the month of February 2022.
Argentine beef exports fell by about 9.1 thousand tons when comparing the first two months of the last two years. Of this reduced volume, about 7.3 thousand tons correspond to lower shipments to China; and another 1.6 thousand tons correspond to Brazil and around 1.3 thousand to Chile, while the rest of the destinations as a whole accumulate an expansion close to one thousand tons.
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