Aug 18, 2015

Brazil Could be Worlds Major Beef Producer by 2020

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Brazil is already famous for its soybean production that rivals that of the United State and it is also closing in on being the largest beef producer in the world as well. According to the executive director of the Brazilian Meat Exporters Association (Abiec), Fernando Sampaio, Brazil could surpass the United States within five years and become the largest beef producer in the world.

According to Abiec, Brazil currently produces 17% of the worlds beef compared to 19% in the U.S. and Brazil is already the largest beef exporter with 21% market share. According to the Agriculture and Livestock Confederation of Brazil (CAN), beef exports have increased 737% over the last 14 years. In 2015 Brazil is expected to export fresh beef to 151 countries and processed beef to 103 countries. Brazil has recently been approved to export fresh beef to the U.S.

Up until 2007, the European Union was the major destination for Brazilian beef. Between 2002 and 2012, Russia emerged as a major buyer of Brazilian beef and recently Hong Kong has surpassed both the European Union and Russia as the major destination for Brazilian beef exports. Going forward, China is expected to be the principal buyer of Brazilian beef.

CAN estimates that the beef sector generates R$ 167 billion per year and is responsible for approximately seven million jobs. The majority of beef production in Brazil is grass fed and production has been increasing even though the acreage dedicated to beef production has been declining.

For a number of years, the Brazilian research organization Embrapa has been promoting ways to improve beef production through pasture regeneration and long term rotations with row crops and pastures. This allows ranchers to increase their incomes through crop production while at the same time increasing their beef production on a smaller pasture base. Additionally, the governments efforts to control foot and mouth disease has been generally successful in Brazil and currently only three states in the Amazon Region are not free of the disease.

There has also been an evolution in the way ranchers think about their cattle production. In the past, beef cattle were seen as an asset to be sold when the rancher needed money. Today, cattle ranching is seen as a viable financial activity deserving a ranchers full time attention.