December 6, 2013
Brazil''s slaughter of female animals rises
Over the last years, the share of female animals (cows and heifers) in the total of animals slaughtered has been increasing, according to Comprehensive Economic Partnership for East Asia (CEPEA), the research centre linked to University of São Paulo.
According to most recent data from the Brazilian Institute of Geography and Statistics (IBGE), this number, which was 36.12% in 2010, upped to 42.08% in 2012 and to 46.15% in 2013 until the first semester. The result of the partial of this year shows that the volume of female animals slaughtered might have reached its peak for this cycle- the last peak was registered in 2005-06, and one cycle usually lasts from six to seven years. Therefore, the current period would be the end for the cow and heifer slaughter expansion.
IBGE indicates that, in the second quarter of 2013, 3.875 million female animals were slaughtered in Brazil, a record for a three-month period and an increase of 14.4% compared to the same quarter in 2012. Since 2004, the slaughter of female animals increased 56.9% in Brazil, following rises of the total volume of animals slaughtered in the same period, of 43.3%.
Due to its highest share of female slaughter in the total volume slaughtered of 48.7%, in the average of the first semester this year, the Central-Western is highlighted among Brazilian regions.
The slaughter of cows and heifers in Brazil has increased over the last years as a way to increase the profitability of cattle farmers in months when their profit decreases. Moreover, this year, different from what has been observed in 2012, fed cattle and cow quotes are moving up significantly in major areas surveyed by CEPEA, which might has also pushed up the slaughter of females.
As a result, the number of calves tends to be smaller, which may impact prices of lean and fed cattle in case the demand remains firm in the upcoming years.
As for the domestic market, the cattle supply continued limited in late November, increasing expectations of new price rises. The ESALQ/BM&FBovespa Index (São Paulo State) for the fed cattle averaged BRL109.59 (us$46.91) on November 29, moving up 1.71% from October 31 to November 29.
In regard of the swine sector, quotes for pork cuts that are usually consumed at the end-of-the-year holidays, such as pork loin and ham, have been moving up in the wholesale market in São Paulo. Players surveyed by CEPEA say that rises are attributed to the slight demand increase. In an attempt to build stocks to meet the higher consumption at the end of the year, slaughterhouses are showing higher interest to purchase.
Concerning the poultry market, the price gap between broiler and pork in November is the highest for this month, considering all CEPEA historical series, started in 2004 for both products. Between November 1 and 29, chilled broiler quotes averaged BRL3.45 (US$1.46) per kilogramme and the regular pork carcass, BRL5.70 (US$2.41) per kilogramme, both traded in the wholesale market of São Paulo- the difference is BRL2.25 (US$0.95) per kilogramme. In the same period last year, when prices of both products were moving up, pork quotes were BRL1.56 (US$0.66) higher than broiler.
In this period of the year, prices of both meats usually increase, affected by the higher demand at the end of the year. As for pork, however, purchasers are refrained due to difficulties to sell in the wholesale market, which has been keeping the downward trend.