Brazil. The cattle herd will grow four percent in 2021 and 2022
31.08.2021 18:32 "Agro Perspectiva" (Kyiv) —
Following are selected highlights from a report issued by a U. S. Department of Agriculture attache in The Brasilia, the Brazilian economy has been slowly recovering from the pandemic crisis, with GDP projection for 2021 at around five percent. Although the first quarter of 2021 saw moderate economic growth of around one percent, its gross value represents a contraction of 3.8 percent in relation to 2020’s first quarter. Post anticipates that challenges faced by the Brazilian bovine and swine sectors since the onset of the COVID-19 pandemic crisis should remain until 2022. The outlook for production, trade, and sector expansion in 2022 is similar to that of 2021. Post estimates that the cattle herd will grow at around one percent in 2021; for 2022, Post forecasts the herd size to remain stable. The price of animal feed for both cattle and swine has continued growing since 2020 because of the increase in corn and soybean meal costs, driving up production costs. Post expects corn and soybean prices to remain elevated in 2022, which will continue to reflect in higher livestock production costs. Post expects beef production to fall around six percent in 2021, reaching 9.5 million tons Carcass Weight Equivalent (CWE), due to the high feed and operational costs, as well as lower consumer demand. For 2022, Post forecasts beef production to increase around two percent driven mainly by growing foreign demand. Beef consumption in 2021 is expected to drop around eight percent, to around 6.9 million tons CWE, yet should increase around one percent in 2022. The high meat prices and lower disposable income of families account for this. Post forecasts that both cattle and beef prices will remain elevated in 2021-2022, due to global meat demand and a relatively devalued domestic currency that favors exports of these products. There are a few uncertainties facing the animal protein sector in 2022, namely, unstable political scenario, together with the Presidential Election; unpredictable crop harvests, due to climatic instability and farmers’ shift from livestock to crop production; and potential reduction in China’s demand for both pork and bovine meat. The swine sector is facing similar challenges to those of the bovine sector, although in 2021 the production costs should remain more stable, and domestic consumption for pork is expected to rise slightly. For 2021, Post forecasts the Brazilian pig production to increase by 2.8 percent and by 1.8 percent in 2022. This forecast is due to high export demand, especially from Asia, mainly due to the continued impact of African Swine Fever outbreaks in the Chinese and several European herds, leveling of production costs – including feed costs - from mid-2021 onwards, and due to growing substitution of beef protein for pork meat in Brazil. The slaughter rate should increase four percent in 2021 and 2022 and, since this rate is higher than the growth rate of production, the total swine population should fall around one percent in 2021 and three percent in 2022. Pork meat production should grow around five percent in 2021 and around 3.5 percent in 2022. The increased demand from Asia for pork should cause Brazilian pork exports to increase around seven percent in 2021, and around five percent in 2022.
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