WASHINGTON – Higher beef exports and a moderate increase in domestic demand are expected to drive a 3 percent increase in beef production in Brazil next year, the Foreign Agriculture Service (FAS) of the US Dept. of Agriculture said in its report on the Global Agricultural Information Network (GAIN).
FAS forecasts beef production at 10.2 million metric tons. Economic projections by market analysts show economic growth and lower inflation in Brazil, which is expected to drive domestic consumption of animal proteins. Domestic consumption of beef is expected to reach 8 million metric tons in 2019, according to FAS. Pork production also is forecast to rise more than 3 percent and reach 3.8 million metric tons due to a rebound in exports, moderate domestic demand and lower costs for feed in 2019.
Meanwhile, exports of Brazilian beef are expected to increase nearly 5 percent to a record of 2.1 million metric tons. Firm demand in China and Hong Kong, and growing demand in Egypt and Chile are expected to drive exports. FAS said growth in these markets, which accounted for more than 70 percent of all beef exports from Brazil, helped offset losses in the Russian market.
Headwinds challenging beef producers in Brazil include volatility of the exchange rate which could impact imports of cattle genetics and vaccines. Also, elections at the end of 2018 and a new federal administration in 2019 are of concern to producers, FAS said.
Calf crop production in Brazil is expected to increase by more than 2 percent as producers continue to expand the cattle herd, FAS said. Weather patterns may benefit pastures in the Midwest and northern regions of Brazil which account for more than 40 percent of cattle production in the country. “Cattle production will continue to be supported by several government programs, such as subsidized agricultural credit for pasture improvement, recovery of degraded pastures, and crossbreeding programs using imported cattle genetics,” FAS reported.
Exports of cattle from Brazil are forecast to increase 15 percent in 2019, which is a lower growth rate compared with 2018. Concerns about Turkey’s currency crisis have raised concerns of Brazilian cattle exporters, FAS said.
“However, Brazilian cattle exporters are trying to reduce their dependence on exports to Turkey by finalizing sanitary agreements with several countries and promoting their product in new markets,” FAS said in its report. “The most important promising markets are Egypt, Myanmar, Jordan, Iraq and Bolivia. Negotiations are ongoing for sanitary agreements with Vietnam, China, Malaysia and Mauritius Islands.”
Brazil is focused on maintaining or increasing the number of beef processing plants in Brazil authorized to export beef to countries such as South Africa, Iraq, Iran, Malaysia, Myanmar and Singapore. FAS noted that “…Other negotiations to open market access for Brazilian beef are concentrated in Thailand and Taiwan. Brazil is also very active in Muslim markets and 90 percent of Brazilian packers are eligible to produce “Halal” meat.”