Brazil’s cattle throughput was 6.94m for the third quarter in 2021, a drop of 10.7% compared with same period last year and the lowest in any quarter since 2004.

There was a particularly sharp reduction in September, with 1.9m cattle processed compared with 2.52m in August. The introduction of a suspension on beef exports to China on 4 September may have contributed to this.

The main reduction is in the slaughter of female cattle being held for breeding.

Brazilian government figures also show that beef exports were particularly high, reaching 181,600t for August and 187,000t for September.

Pigs and poultry

It was a complete contrast when it comes to pig processing, with the third quarter in 2021 reaching the highest levels since records began in 1997.

Numbers were up 7.8% compared with the same period last year and up 4.5% compared with the second quarter in 2021. Poultry throughput was also up in the third quarter, 1.2% higher than for the same period in 2020.

Volatile beef prices

Beef prices in Brazil have been particularly volatile over recent months. They had been in gradual decline, having peaked at the equivalent of almost €3.50/kg in June, but fell rapidly in September and bottomed out in October at the equivalent of €2.75/kg.

They have since recovered strongly, despite the Chinese market remaining closed to Brazilian beef exports, and this week are at the equivalent of €3.30/kg.

Comment

If we had known in advance that Brazil would be excluded from the Chinese market for the last four months, we would have expected a dramatic drop in the world beef price.

However, this hasn’t happened for a number of reasons. Fewer cattle have been slaughtered in Brazil in the third quarter, which means the volume of production has been reduced.

Additionally, Brazil stands by ready to benefit from the 300,000t tariff-free meat quota created by Russia and they have switched a considerable amount of export volume to the US, where they sent over 17,000t of beef in November, making it their biggest export market last month.

Additionally, throughput was down dramatically in Australia this year, with the herd building continuing, meaning that slaughter numbers will be the lowest in 36 years and beef export volumes the lowest this century.

The other part of global meat musical chairs is that the Brazilian absence from the Chinese market has created a major opportunity for US exports to surge.

All of this means that the market has kept ahead of the supply available around the world, including Britain and the wider EU, which in turn has kept the demand for Irish cattle strong in the final weeks of 2021.