Beef Prices Drop Amidst Trade Headwinds and Shifting Demand

US Tariffs Impact Brazilian Exports, Domestic Market Faces Pressure

Brazil’s cattle market experienced a price downturn on Thursday, with analysts pointing to the lingering effects of United States tariffs as a primary driver. This shift is impacting the competitiveness of Brazilian beef on the global stage.

Trade Ruffled by Tariffs

The imposition of U.S. tariffs is significantly altering Brazil’s export landscape, making the nation a less attractive supplier. According to consultancy analyst **Fernando Henrique Iglesias** of Safras & Mercado, the Brazilian refrigeration industry is actively seeking alternatives to compensate for the anticipated absence of the U.S., a major importer, in 2025.

“With the rates, Brazil is no longer competitive for the United States and the Brazilian refrigeration industry seeks ways to supply the absence of the country’s second major importer in the country in 2025,”

—Fernando Henrique Iglesias, Consultancy Analyst

Additionally, the influx of cattle from feedlots, which typically possess reduced holding capacity for producers, is further weighing on market dynamics.

Wholesale Market Sees Further Declines

The downward trend extended to the wholesale beef market on Thursday. Expectations are for this decline to persist in the short term, fueled by a slowdown in consumer spending as the month progresses. **Iglesias** noted that beef is facing increased price competition from other protein sources, particularly chicken.

The price for hindquarter cuts saw a reduction of R$0.70, now priced at R$21.80 per kilo. Forequarter cuts experienced a steeper drop of R$1.25, settling at R$17.50 per kilo. Similarly, the “needle tip” cut decreased by R$1.00, also trading at R$17.50 per kilo.

Average Cattle Prices (Arroba)

• São Paulo: R$ 297.83 (previous day: R$ 298.67)
• Goiás: R$ 279.64 (previous day: R$ 281.43)
• Minas Gerais: R$ 283.53 (previous day: R$ 284.41)
• Mato Grosso do Sul: R$ 296.70 (previous day: R$ 297.73)
• Mato Grosso: R$ 296.35 (previous day: R$ 298.92)

Exchange Rate Fluctuations

The commercial dollar closed Thursday’s session with a slight decrease of 0.25%, trading at R$5.5447 for purchase and R$5.5467 for sale. Throughout the day, the U.S. currency exhibited volatility, fluctuating between a low of R$5.5429 and a high of R$5.6099.

Global meat demand remains a key indicator for the sector. In early 2024, for instance, China’s pork imports saw a nearly 30% year-on-year increase, highlighting shifts in international protein consumption patterns (Source: USDA, January 2024).