Live cattle exports show the worst performance in recent years

The live cattle export market, which had been consolidating itself up until recently, retreated and, in 2021, showed one of the performance levels of the last decade.

Exports in 2021 yielded only US$ 66 million to Brazil, 70% less than in 2020 and 86% below the values of 2018, according to data from Secex (Secretariat of Foreign Trade).

Gastão Carvalho Filho, from Boi Branco, a company that operates in this industry, says that there are many reasons why the sector demonstrated results below expectations.

The foreign demand for beef is strong. Therefore, Brazil has increased the number of its protein exports, making domestic beef prices rise substantially.

According to Gastão, exporting live cattle has become unfeasible since acquiring livestock and exporting it involve quite onerous costs, despite favorable dollar prices.

In addition, Brazil suffers from competition with other countries, such as Uruguay, which generally maintains better quality cattle; the European Union, which subsidizes exports; and Australia, which is closer to the main importing countries.

One of the factors that weigh the most in terms of export costs is sea freight, which has recently increased twofold, according to Carvalho. Cattle feeding also went through a strong upward correction, associated with the inputs that make up the animal feed.

The abrupt downturn in the cattle export market affect companies that had prepared themselves by expanding the infrastructure aimed at foreign sales.

Some have increased grain crops to reduce livestock feed costs. Others even invested in the manufacture of their own feed.

Some believe that the light at the end of the tunnel lies in the export of cows and calves to China and Africa. However, China is likely to prefer animals from Uruguay. Brazil can gain space in Africa.

According to the Ministry of Agriculture, the total export of live animals, including poultry and swine, yielded an earning of US$169 million last year, 44.5% less than in 2020.

Last year, the export of poultry led the sector, generating a financial worth of US$ 88.4 million. In 2020, however, the largest exports were of cows and calves, with a sum of US$ 217 million.

Source: Folha de S. Paulo

To read the full original article please follow the link: https://www1.folha.uol.com.br/colunas/vaivem/2022/01/exportacao-de-gado-vivo-tem-pior-desempenho-dos-ultimos-anos.shtml

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