Brazil Beef Exports Shatter Records Once More this June

According to the latest Brazil Ministry of Industry, Foreign Trade, and Services data, Brazilian beef export volumes (excluding derived products) this June rose by 14% MoM and 26% YoY and reached the highest level for a June on record, at 192 thousand metric tons (mt). The YoY increase was the second after three months of ongoing double-digit declines. It was also the fastest in seven months. The recent previous losses were mainly caused by the temporary suspension of beef exports from Brazil to China from late February through late March due to an isolated and atypical mad cow disease case. The export ban, lasting in some cases until April or May, also extended to other important markets such as Russia, several countries in the Middle East, and Southeast Asia.

According to the same data, exports to China led June's gains, as volumes to this location rose 22% MoM and 32% YoY (+32.83 thousand mt) to their second highest level on record, at 135 thousand mt, representing 70% of total Brazilian export volume. This was also the highest share for China and any other country recently.

Another notable destination was Chile, to which Brazil recorded the highest amount of exports since December 2021, at 10 thousand mt. Exports to Chile soared by 118% YoY (+5.4 thousand mt). It was the largest net volume YoY gain for this location on record. Chile was the second largest destination for Brazilian meat, representing 5% of the total.

Meanwhile, exports to Russia also experienced notable growth, up by 215% YoY (+2.2 thousand mt) to 3.2 thousand mt.

Gains to the aforementioned countries – and also from the United States, the United Arab Emirates, Hong Kong, the Philippines, and others – managed to more-than-offset losses from Egypt, Israel, Indonesia, and others.

Source: Tridge and Brazil Ministry of Industry, Foreign Trade, and Services

Prices return to MoM declines. Despite the strong external demand, the average export price for Brazilian beef fell by 1% from May’s six-month high at USD 5.05/kg. In annual terms, prices dropped by 23% YoY. The price decline drove total export value, at USD 974 million, to drop YoY for the fifth consecutive month, down by 6%. Yet, it was the slowest decline pace during the same period as substantial volume managed to offset some of the loss.

Source: Tridge and Brazil Ministry of Industry, Foreign Trade, and Services

Strong production numbers are driving exports up but prices are down. As mentioned in a past Tridge report, data from Instituto Brasileiro de Geografia e Estatística (IBGE) showed that cattle slaughter increased YoY in both the number of cattle (7.3 million heads) and total weight in Q1-23 (1.9 million mt). These production gains allow a higher export volume. Nonetheless, despite higher overseas demand, higher beef production also contributes to an oversupply in the domestic market, where consumption remains subdued. This, in addition to lower production costs, is leading prices to remain subdued compared to the previous year.

Moving forward, export volume is expected to continue growing. According to its seasonal trend, export volume is likely to continue reaching higher levels until August, when export volume tends to peak. Moreover, if it follows the average YoY growth volume presented during January, May, and June of this year (excluding the months when the ban was in place), the export volume could reach a new record of 2.1 million mt. Chinese demand is expected to remain the main driver.