Brazil’s Beef Export Value in April Drops by Fastest YoY Rate Since 2009, A Recovery Expected for Volume in May, but not in Prices

Published 2023년 5월 15일

In April 2023, the export value of beef exports from Brazil dropped by 45.9% year-over-year, their worst decline in a single month since 2009. There were also significant drops in volume and average export prices. Part of the reason is the export suspension to several countries from late February to late March. Major importers shifting origins import origins also contributed to the decline.

According to the latest Brazil Ministry of Economy data, Brazilian beef export value (excluding derived products) fell by 45.9% year-over-year this April , their worst annual decline in a single month since the 2008-2009 financial crisis.

In itself, the export value was USD 528 million, the lowest level in a single month since November 2021. The decline in value was a result of a drop in exported volume, at 110 thousand mt (also the lowest level since November 2021), down 30% year-over-year, while the average export price totaled USD 4.79/kg, down 23% year-over-year and marking its lowest level since May 2021.

For the first four months of the year, export value totaled USD 2.51 billion, down 30% YoY, with total volume, at 521 thousand mt, and the average price, at USD 4.83/kg, both down 16% YoY.

Source: Tridge and Brazil Ministry of Economy

According to Brazilian Meat Packers Association (ABRAFRIGO) data, which include derived products in their total beef export numbers, the decline in export value in Jan-Apr 2023 has been present in most major destinations, including China, which currently represents 46% of total Brazilian beef exports. Other major destinations with double-digit declines include the US, Egypt, and Israel. Destinations that experienced growth during this period, but not enough to offset the losses in the aforementioned countries, include Saudi Arabia, the UAE, several countries from the EU, and Russia.

Part of the decline can still be explained by the export suspension to several countries from late February to late March, as part of the exports which resumed after this period, particularly those to China, might be reflected until May data comes up. As discussed in a previous Tridge report, an export suspension to China and other importing countries was enacted after an isolated and atypical mad cow disease case was detected in the Pará state in February. Most bans were lifted in late March and early April.

However, declines in some major importers represent a lower demand and/or shifting in import origins. For example, total US imports of beef and veal during Q1 2023 fell 3% year-over-year to 434 thousand mt, signaling a small decline in demand for beef from abroad. In addition, Brazil’s share in US exports from Q1 2022 to Q1 2023 has dropped (US import volume from this location down 11% YoY) while the share of other producers such as Canada, Australia, and Uruguay has increased, with their exports increasing 8%, 14%, and 42% YoY, respectively. It is worth noting that Brazil can export up to 65 thousand mt of beef duty free under the current tariff rate scheme of the US, but competes with other countries to fill the quota. Nonetheless, Brazilian exports typically surpass the quota in the early months of the year and continue strong throughout it despite the 26.4% duty applicable to their exports beyond it. Yet, other producers, such as Australia, which had lost considerable market share to Brazil in the past years as its production was declining, are now regaining part of the lost ground in the US as its output numbers improve.

Export volume could see a recovery in May, but multi-year low prices will still result in subdued total value. As exports to the countries which had the temporary suspension recover, it’s likely that total Brazil beef export volume numbers will rebound in May. In addition, according to export volume seasonality, exports in this month are typically greater than those from January through April. Declines in beef production in the EU and the US could further boost demand for Brazilian beef, in addition to a brighter outlook for Chinese demand. Nonetheless, as prices remain considerably lower than 2022’s levels, it seems that export value will continue to trail last year’s levels in the upcoming months.