September 9, 2013
Brazil''s August pork prices down
In most regions surveyed by the Comprehensive Economic Partnership for East Asia (CEPEA), the upward trend observed for Brazilian hog and pork prices weakened in late August while in some areas quotes registered small decreases.
The low supply of slaughter-ready animals increased slightly compared to the demand, while in the Southern Brazil, prices kept the upward trend, buoyed by the good exports performance.
Cattlemen expenses regarding calves purchases resumed increasing this year, accumulating a 9.4% increase from January to July. This number accounts for a "Brazilian average", calculated by CEPEA based on prices practiced on typical farms in 10 states (Goiás, Minas Gerais, Mato Grosso do Sul, Mato Grosso, Pará, Paraná, Roraima, Rio Grande do Sul, São Paulo and Tocantins).
Costs with animal purchases dropped 1.5% in January to July 2012, and for the entire 2012 the decrease was 2.25%. The increase of expenses with calves is due mainly to higher prices of calves in 2013. The ESALQ/BM&FBovespa calf price Index (Mato Grosso do Sul State; nelore, 8 to 12 months age) has increased 15% this year, to close at BRL804.18 (US$337.47) on August 30. In the same period of 2012, quotes dropped 5%.
The Index has registered a monthly average of BRL800.94 (US$347) in August, 12.3% more than in the same period of last year and the second highest of CEPEA series, in nominal terms, started in February 2000- after that registered in July 2013.
Expenses with calves and lean cattle purchases are the item that cost more in the cattle finishing, not only in Brazil, but also in other beef producing countries. As for the fed cattle market in late August, prices from calves to beef were firm in the Brazilian market. In general, the supply was below the demand, underpinning quotes.
As for the poultry sector, broiler price rises were attributed to the narrowing of price gap between broiler and beef. In August, the average price of BRL3.15 (US$1.37) per kilogramme for the chilled broiler was 50% smaller than beef carcass quotes, both in the wholesale market of the Greater São Paulo. In July, broiler prices were 54% cheaper than beef, also in the wholesale market of the Greater São Paulo.