Weak demand and Chinese pullback weigh on cattle prices

The decline in both cattle and beef prices so far reflects ample supplies of slaughter-ready cattle and softer demand from meatpackers and consumers alike. Adding to the downturn is the prospect of China—Brazil’s largest beef buyer—stepping out of the market, at least until October.

The reason: Brazil has effectively used up its annual export quota of 1.106 million tonnes. Shipments within the quota carry a 12% tariff, while anything above it faces an additional 55% duty.

The following chart shows a history of Brazilian beef exports to China from January 2022 onward. The chart was prepared using DataLiner data:

Brazilian Beef Exports | Jan 2022 to May 2026 | TEU

Source: DataLiner (Click here to request a demo)

In a report released Saturday, July 4, consultancy Safras & Mercado said Brazilian beef exports to China totaled 158,300 tonnes in June, marking the “official exhaustion” of the quota. Through May, official Chinese data show Brazil had filled 65.4% of it. Chinese authorities count against the quota based on the date cargo arrives at Chinese ports—meaning shipments from Brazil in the final months of 2025, which took roughly 40 days to arrive, were still being counted.

With the quota now exhausted and some beef originally bound for export being redirected to the domestic market, both cattle and beef prices are expected to face additional pressure.

A Safras & Mercado survey also found wholesale beef prices declining in São Paulo, Brazil’s largest consumer market. On Friday, July 10, alone, forequarter cuts fell R$1 per kilogram, to R$19.

“China will certainly be missed. It buys around 130,000 tonnes a month, and we can’t redirect all of that to other markets overnight. But since other buyers—especially the United States—are still buying strongly, we expect prices to ease gradually and in an orderly way,” says Lygia Pimentel, chief executive of consultancy Agrifatto.

With Chinese demand softening, several Brazilian meatpackers—including JBS, Frigol, Better Beef, Plena Alimentos, and Iguatemi Beef—have begun granting collective vacations to workers at some plants as a way to manage domestic beef supply.

That’s likely to add further pressure on cattle prices, upending the market’s usual seasonal rhythm. Slaughter volumes typically rise in June and July, but without Chinese demand, this year looks markedly different.

Isabella Cavalcante, livestock market coordinator at Agrifatto, expects fattened cattle prices to bottom out for the year in July. “Between seasonally higher cattle supply and the China situation, July will likely bring the lowest fattened cattle prices of the year,” she says.

Cesar de Castro Alves, head of agribusiness consulting at Itaú BBA, says that from late July into early August—when exports are expected to “drop sharply”—the beef volumes originally headed for China will start flowing into the domestic market instead.

That, he notes, will coincide with a seasonal rise in feedlot cattle supply, which traditionally picks up in the second half of the year.

At the retail level, with cattle and wholesale beef prices continuing to slide, some analysts believe consumer prices could ease too while China stays on the sidelines.

“When cattle prices fall, wholesale beef prices follow, and vice versa. Retail is a different story. I don’t think the drop [in cattle prices] will be small, but retail prices will likely fall less, since retailers will try to protect their margins. If prices do come down, it should help boost consumption—especially with chicken so cheap and beef losing market share,” says Alves of Itaú BBA.

“Historically, sharp drops in cattle and wholesale beef prices often don’t make it all the way to the retail shelf,” agrees Fernando Iglesias of Safras & Mercado. He adds that weak demand also reflects current beef prices and high household debt levels.

Beef is also facing stiffer competition from other proteins, particularly chicken and pork. Chicken’s price advantage over beef, says Cavalcante, “is at a historically very high level,” further weighing on beef consumption.

Iglesias expects conditions in the beef market to shift in the fourth quarter. He anticipates weaker incentives for feedlot finishing in the final three months of the year, which should push fattened cattle prices back up.