Brazil’s beef exports to China could face second-half gap, pressure cattle prices

The rapid pace of Brazil’s beef exports to China in 2026 has raised concerns across the cattle sector. According to Chinese import data from the General Administration of Customs, Brazil had already shipped 372,100 tonnes of beef to the country by February, equivalent to 33.6% of the 1.1 million-tonne quota. With one-third of the quota already filled, expectations are rising that the limit could be reached early in the second half of the year, raising important questions about market behavior in the coming months, especially for cattle producers.

The possibility of a tariff of as much as 55% on shipments exceeding the quota adds to the challenge. Against that backdrop, analysts say the sector is likely to enter a period of adjustment, with shifts in export destinations and direct effects on domestic cattle prices.

Even with those uncertainties, the strong export performance at the start of the year shows that international demand remains firm. In the first two months of the year, Brazil shipped 557,240 tonnes and generated $2.865 billion in revenue, up 22% in volume and 39% in value from a year earlier, underscoring the importance of Brazilian beef in the global market.

Datamar data shows that Brazil exported 7,780 TEUs of beef to China in January 2026, marking a 4.8% year-over-year (YoY) increase. The following chart, compiled using intelligence from the DataLiner platform, details the monthly outbound shipments of Brazilian beef to the Chinese market:

Beef Exports to China | Jan 2023 – Jan 2026 | TEUs

Source: DataLiner (click here to request a demo)

China’s pace is bringing forward a market shift

According to Hyberville Neto, director at HN AGRO, the current pace suggests the quota will be reached quickly. “We believe our quota will be exhausted early in the second half, between July and August,” he said.

That view is shared by Fernando Henrique Iglesias of Safras & Mercado, who said the timeline could be even tighter. “At the current pace, Brazil’s quota could be exhausted between May and, at the latest, early July. That is effectively the shelf life of our exports to China,” he said.

Lygia Pimentel, chief executive of Agrifatto, also pointed to an early exhaustion. “Yes. Given the current pace of exports, around 110,000 tonnes shipped to China per month, we will reach the quota between June and July,” she said.

Third quarter could bring pressure on cattle prices

If the quota is exhausted, the market may face a period of reduced exports to China, especially in the third quarter. That prospect is troubling analysts because of its potential effect on cattle prices just as more feedlot animals reach the market.

Iglesias warned of this dynamic. “What we are basically going to see is nine months of very active exports. The first half and the final quarter, while a gap forms during the third quarter of the year. That could have a very negative effect on cattle prices as feedlot animals come to market, which is precisely in the third quarter,” he said.

Pimentel also highlighted the risk. “The current context will bring a great deal of risk and volatility. If the quota is reached in July, we will face an export hiatus to China between August and October, which means we will need to intensify shipments to other countries,” she said.

According to her, that period coincides with larger cattle supply. “That tends to put pressure on prices at a time when animals are leaving the feedlots,” she said.

Market diversification will be essential

With the limitation imposed by China, Brazil is expected to intensify its search for new markets. For Hyberville Neto, a redistribution of export destinations will be unavoidable. “Brazilian beef is highly competitive, but if those tariffs are in fact maintained, the tendency is for the composition of our export destinations to change,” he said.

He also pointed to the role of alternative markets. “Hong Kong has historically functioned as an indirect gateway into China and remains a relevant market that could gain importance in scenarios of trade restriction,” he said.

Another relevant point involves indirect trade partners. “Uruguay has a generous quota of 324,000 tonnes and used only 10.9% of that total in the first two months. It is a country that has been buying more from Brazil and could supply itself with our beef, freeing up a larger share of its own production to serve China,” he said.

The Safras & Mercado analyst also stressed diversification. “Brazil is looking for diversification, looking for new alternatives in this global context. We have the Japanese mission arriving in Brazil now, and we also need to consider other relevant countries such as the United States, Vietnam, Indonesia, the Philippines, which has been buying more, the European Union and the United States,” he said.

Lower supply could help balance the domestic market

Despite the external uncertainties, the domestic market may not face excessive supply. That is because Brazil is currently in a phase of female cattle retention, which reduces beef production.

Hyberville Neto explained the dynamic. “Expectations are for lower beef production in Brazil due to female retention, which was already evident in the first months of 2026. Even though the quota issue is highly relevant, lower production combined with the redirection of part of output to other markets may help keep the domestic market from becoming oversupplied,” he said.

Agrifatto also sees room for domestic absorption. “Certainly,” Pimentel said when asked whether volumes not exported could be redirected to the domestic market.

That balance between tighter supply and redirected exports may help prevent steeper price declines, even if the export “gap” weighs on external sales.

China’s return could lift prices late in the year

If the third quarter may prove challenging, the last quarter brings more positive prospects. The expectation is that China will resume purchases, which could once again heat up the market.

Iglesias expects a strong move. “When we look at the last quarter, once China returns to buying Brazilian beef with the 2027 quota in mind, we could see the market rise aggressively,” he said.

Pimentel also pointed to this scenario. “In November, the Chinese will need to return to the market, because what is shipped in November will only arrive in China around January. That should bring another strong wave of buying, perhaps even a compensatory one,” she said.

Still, dependence on the Chinese market remains a point of concern. Iglesias summed it up this way: “As long as there is no quota management, we will remain hostage to this situation: a very fast export rush followed by a gap in sales to what remains our main market.”

Global backdrop remains favorable despite risks

Even with the challenges posed by China, the international environment still offers opportunities. The United States, for example, is expected to import about 2.5 million tonnes in 2026, maintaining strong demand for Brazilian beef.

Other markets are also growing, including Chile, Russia, Egypt, the United Arab Emirates, Mexico and Saudi Arabia. There are also expectations for the opening and consolidation of markets such as Vietnam, Indonesia, Japan and South Korea.

External factors such as international conflicts may still affect logistics costs. Even so, the Middle East accounts for a relatively small share of Brazilian exports, limiting the negative impact.

For Pimentel, Brazil’s competitiveness remains a key advantage. “Brazil will stay competitive as long as its prices remain lower than those of its competitors. We project that this will remain the case throughout 2026. And, of course, factors such as standardization, sanitary protocols, which we follow very strictly, and strong marketing to convey our message to clients also matter,” she said.

What cattle producers should watch

In this environment, producers should pay close attention to volatility and opportunities to hedge prices. The futures market could be an important tool to secure greater predictability.

Iglesias stressed that point. “Producers need to pay close attention to the volatility this safeguard measure imposed by China can cause. It can create a great deal of instability in prices on the B3. Today, for example, it offers an interesting opportunity and allows for favorable price locking,” he said.

In his view, that environment may favor better planning. “It provides a good opportunity to lock in prices, to put together a well-structured hedge, and it can give cattle producers a very interesting condition to work within this market and achieve greater predictability in their cash flow,” he said.

In the end, 2026 is likely to be marked by a more dynamic market, one that is also more sensitive to external factors. Between the risk of a temporary gap in exports and the prospect of a strong rebound at the end of the year, the key word for cattle producers will be management.

Source: Notícias Agrícolas

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