USDA GAIN: Livestock and Products
08 March 2012
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.
Animal Numbers, Cattle
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.
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.
Meat, Beef and Veal
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.
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.
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.
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.
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