Livestock and Products Semi-annual

An Expert's View about Agriculture and Animal Husbandry in Brazil

Posted on: 19 Mar 2012

Post maintained production estimates for Brazilian beef and pork for 2012, but revised upwards both beef and pork exports.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 1/3/2012 GAIN Report Number: BR 0805 Brazil Livestock and Products Semi-annual Semi-annual Livestock 2012 Approved By: Robert Hoff, Agricultural Counselor Prepared By: Joao F. Silva, Agricultural Specialist Report Highlights: Post maintained production estimates for Brazilian beef and pork for 2012, but revised upwards both beef and pork exports to reflect new estimates made by trade sources. Post also revised the 2011 estimate to include final export and import data. While in general, domestic demand for both meats supported the expansion in production last year, trade sources believe that a sustained domestic consumption combined with a recovery in exports will contribute to higher production this year. Page 1 Commodities: Animal Numbers, Cattle Production: Post forecasts an increase of 3 percent in cattle inventories in 2012 mostly due to government financial support for cattle herd rebuilding, genetic improvements, pasture improvements, and sustained cattle prices. Thus, cattle inventories are expected to reach nearly 204 million head by the end of the year. Trade: Post revised upwards the forecast for cattle exports in 2012 with increased shipments expected to Venezuela and Suriname due to competitive prices. Despite a drop in cattle exports of nearly 38 percent in 2011, the Brazilian Meat Packing Industry officially submitted to the federal government on January 31, 2012 a request for a 30 percent export tax on live cattle exports. Page 2 Production, Supply and Demand Data Statistics: Animal Numbers, Cattle Brazil 2010 2011 2012 Market Year Begin: Jan 2010 Market Year Begin: Jan 2011 Market Year Begin: Jan 2012 USDA Official New Post USDA Official New Post USDA Official New Post Total Cattle Beg. Stks 185,159 185,159 190,925 190,923 197,280 197,551 Dairy Cows Beg. Stocks 37,032 37,032 38,185 38,185 39,455 39,510 Beef Cows Beg. Stocks 51,845 51,845 52,250 53,458 52,500 55,230 Production (Calf Crop) 49,200 49,200 49,445 49,445 50,500 49,690 Total Imports 68 68 8 5 15 15 Total Supply 234,427 234,427 240,378 240,373 247,795 247,256 Total Exports 655 654 350 402 600 635 Cow Slaughter 11,600 11,600 11,050 10,750 10,750 10,750 Calf Slaughter 300 300 300 300 300 300 Other Slaughter 27,500 27,500 28,040 28,050 28,735 28,735 Total Slaughter 39,400 39,400 39,390 39,100 39,785 39,785 Loss 3,447 3,450 3,358 3,320 3,500 3,250 Ending Inventories 190,925 190,923 197,280 197,551 203,910 203,586 Total Distribution 234,427 234,427 240,378 240,373 247,795 247,256 1000 HEAD, PERCENT Page 3 Commodities: Meat, Beef and Veal Production: Post forecasts beef production to increase by about 2 percent in 2011 due to the following factors: a) increased exports, b) continued growth in domestic demand for beef as the Brazilian economy is expected to grow in 2012 at a rate of 3.3 percent, and c) higher consumer purchasing power which will lead to increased consumption of animal protein. Trade: Post revised beef exports to increase by 4 percent in 2012 as Brazilian beef exporters are optimistic about recoveries in their exports to the Russian Federation, despite the slow relisting of Brazilian plants. They are also optimistic about sales to other markets such as Egypt, China, Chile, Cuba, Iraq, and Morocco. Despite the financial crisis in the European Union, exporters also expect to increase exports to that market because more Brazilian cattle farms are enrolled in the EU?s traceability program due to the flexibility in the EU?s interpretation of Normative # 61 which lays out Brazil?s traceability program. In addition, exporters also expect a continued recovery in processed beef exports to the United States. Post slightly revised beef trade estimates for 2011 to include finalized import and export data. Note: Differences between export data reported by Brazilian trade sources and those used by Post are due to the use of different conversion factors. Brazilian sources use a 2.5 percent factor for conversion of processed beef into Carcass Weight Equivalent (CWE), while post uses 1.79. The same applies for boneless beef, as Post uses 1.40 as the conversion factor, while Brazilian trade sources use 1.36. In addition, and as per FAS reporting instructions, variety meats (beef offals), HTS 0206 are not included for reporting purposes in our PSD and Trade Matrix tables. Page 4 Production, Supply and Demand Data Statistics: Meat, Beef and Veal Brazil 2010 2011 2012 Market Year Begin: Jan 2010 Market Year Begin: Jan 2011 Market Year Begin: Jan 2012 USDA Official New Post USDA Official New Post USDA Official New Post Slaughter (Reference) 39,400 39,400 39,390 39,100 39,785 39,785 Beginning Stocks 0 0 0 0 0 0 Production 9,115 9,115 9,030 9,030 9,210 9,210 Intra-EU Imports 0 0 0 0 0 0 Other Imports 35 35 45 40 50 60 Total Imports 35 35 45 40 50 60 Total Supply 9,150 9,150 9,075 9,070 9,260 9,270 Intra EU Exports 0 0 0 0 0 0 Other Exports 1,558 1,558 1,325 1,340 1,375 1,394 Total Exports 1,558 1,558 1,325 1,340 1,375 1,394 Human Dom. Consumption 7,592 7,592 7,750 7,730 7,885 7,876 Other Use, Losses 0 0 0 0 0 0 Total Dom. Consumption 7,592 7,592 7,750 7,730 7,885 7,876 Ending Stocks 0 0 0 0 0 0 Total Distribution 9,150 9,150 9,075 9,070 9,260 9,270 1000 HEAD, 1000 MT CWE, PERCENT, PEOPLE, KG Page 5 Brazil Commodity Meat, Beef and Veal Time Period Jan-Dec Units: Metric Tons Imports for: 2010 2011 U.S. 0 U.S. 0 Others Others Argentina 8.082 7.192 Paraguay 6.357 7.213 Uruguay 10.217 12.399 Australia 278 1.410 Total for Others 24.934 28.214 Others not Listed 78 24 Grand Total 25.012 28.238 HTS: 0201,0202,021020,160250 Quantity in Product Weight Equivalent (PWE) Updated February 23, 2012 Page 6 Export Trade Matrix Country: Brazil Commodity: Meat, Beef Time Period Jan-Dec Units: Metric Tons 2010 2011 U.S. 13.534 U.S. 12.313 Others Others Angola 7.372 11.553 Algeria 30.359 7.361 Canada 3.372 1.767 Chile 21.394 35.480 Egypt 117.829 101.086 European Union 119.157 101.966 Hong Kong 66.869 73.956 Iran 191.181 130.649 Iraq 4.871 4.431 Israel 25.734 16.075 Lebanon 19.992 16.012 Libya 16.270 5.362 Japan 3.251 2.912 Jordan 10.381 8.815 Philippines 12.605 9.046 Russian Federation 285.007 228.897 Saudi Arabia 31.051 29.031 Singapore 5.150 5.777 Ukraine 3.691 3.704 UEA 9.625 8.780 Venezuela 40.125 70.901 Total for Others 1.025.286 873.561 Others not Listed 38.791 41.212 Grand Total 1.077.611 927.086 HTS:0201,0202,021020,160250 Quantity in Product Weight Equivalent (PWE) Updated February 23, 2012 Page 7 Commodities: Meat, Swine Production: Post revised upward the forecast for pork production in 2012 by nearly 3 percent. Post projections reflect the current optimism of the pork industry for a sustained, strong domestic consumption combined with a recovery in the export market. The major factor of concern to hog producers is the recent increase in feed prices, mostly for corn. According to the association of pork producers, the increase in corn prices could squeeze their margins, but the federal government will likely interfere in the market with subsidized corn auctions to protect the industry. Trade: Post forecasts pork exports to rebound by 5 percent in 2012 as demand from major importers is expected to increase (Hong Kong, Ukraine, Angola and Singapore). Brazilian pork exporters are also strategically focused on two new markets: China and the United States. The first pork shipments to China occurred in January 2012 and totaled 52 metric tons. Trade sources believe that exports to China will only be significant in 2013. Trade sources also expect that exports to the United States could pick up at the second half of 2012. The major uncertainties in 2012 are Argentina with their new import restrictions and the slow relisting of Brazilian plants to export to the Russian Federation. Post slightly revised pork export estimates for 2011 to include final trade numbers. Page 8 Production, Supply and Demand Data Statistics: Animal Numbers, Swine Brazil 2010 2011 2012 Market Year Begin: Jan 2010 Market Year Begin: Jan 2011 Market Year Begin: Jan 2012 USDA Official New Post USDA Official New Post USDA Official New Post Total Beginning Stocks 35,122 35,122 36,652 36,652 38,282 38,282 Sow Beginning Stocks 2,890 2,890 2,925 2,925 2,900 2,900 Production (Pig Crop) 36,970 36,970 37,750 37,750 37,700 37,700 Total Imports 0 0 0 0 0 0 Total Supply 72,092 72,092 74,402 74,402 75,982 75,982 Total Exports 0 0 0 0 0 0 Sow Slaughter 90 90 95 95 80 80 Other Slaughter 34,200 34,200 34,775 34,775 35,246 35,246 Total Slaughter 34,290 34,290 34,870 34,870 35,326 35,326 Loss 1,150 1,150 1,250 1,250 1,200 1,200 Ending Inventories 36,652 36,652 38,282 38,282 39,456 39,456 Total Distribution 72,092 72,092 74,402 74,402 75,982 75,982 1000 HEAD, PERCENT Page 9 Meat, Swine Brazil 2010 2011 2012 Market Year Begin: Jan 2010 Market Year Begin: Jan 2011 Market Year Begin: Jan 2012 USDA Official New Post USDA Official New Post USDA Official New Post Slaughter (Reference) 34,290 34,290 34,870 34,870 35,326 35,326 Beginning Stocks 0 0 0 0 0 0 Production 3,195 3,195 3,227 3,227 3,295 3,311 Intra-EU Imports 0 0 0 0 0 0 Other Imports 1 1 1 1 1 1 Total Imports 1 1 1 1 1 1 Total Supply 3,196 3,196 3,228 3,228 3,296 3,312 Intra EU Exports 0 0 0 0 0 0 Other Exports 619 619 582 584 570 615 Total Exports 619 619 582 584 570 615 Human Dom. Consumption 2,577 2,577 2,646 2,644 2,726 2,697 Other Use, Losses 0 0 0 0 0 0 Total Dom. Consumption 2,577 2,577 2,646 2,644 2,726 2,697 Ending Stocks 0 0 0 0 0 0 Total Distribution 3,196 3,196 3,228 3,228 3,296 3,312 1000 HEAD, 1000 MT CWE, PERCENT, PEOPLE, KG Page 10 Export Trade Matrix Country Brazil Commodity Meat, Swine Time Period Jan-Dec Units: Metric Tons Exports for: 2010 2011 U.S. 0 U.S. 0 Others Others Albania 4.349 9.091 Angola 22.686 28.703 Argentina 31.263 39.254 Armenia 3.000 5.571 Azerbaijan 593 3.081 Chile 2.534 3.222 Ecuador 2.402 3.585 European Union 127 23 Georgia 2.956 5.914 Kazakhstan 5.969 616 Haiti 2.064 3.282 Hong Kong 68.950 93.139 Moldova 5.066 3.217 Paraguay 826 1.091 Russian Federation 228.931 124.182 Singapore 26.254 23.547 South Africa 85 149 UAE 5.321 4.981 Ukraine 39.995 61.413 Uruguay 11.540 15.156 Venezuela 4.339 11.780 Total for Others 469.250 440.997 Others not Listed 6.878 8.123 Grand Total 476.128 449.120 HTS: 020311,020312,020319,020321,020322,020329, and 021011,021012,021019,160241,160242,160249 Quantity in Product Weight Equivalent (PWE) Updated February 10, 2012 Page 11
Posted: 19 March 2012

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