Brazilian Beef Exports in November Drop to Lowest Point in Record Year

According to data from Brazil’s Ministry of Economy, Brazilian beef exports (fresh/chilled and frozen beef) in November 2022 totaled 149 thousand mt with a value of $0.778 billion, the lowest level in 10 months in both volume and value.

Exports in both value and volume terms continued to be considerably higher compared to those in the same month in 2021 (94% higher in terms of value and 82% in terms of volume), but this is because of abnormally low export levels in the last quarter of 2021 due to a halt of shipments to China, following the detection of mad-cow disease. China is Brazil's largest beef export market.

The average export price in November was $5.23/kg, the lowest level since December 2021. This represents a decline of 11% MoM. Prices are now down 23% from their record high of $6.82/kg in June. Prices have been declining on the back of lower domestic demand and ongoing growth in global beef supply, including that of Brazil. Additionally, input prices have been declining since their peaks in the middle of the year.

In annual terms, prices were 6% above November 2021's levels. Prices have posted YoY growth each month continuously since February 2021. However, November 2022's growth pace was the second-slowest since March 2021.

Source: Tridge and Brazil Ministry of Economy

Year-to-date exports in value and volume continued to reach fresh records. Brazilian exports in terms of value so far this year (Jan-Nov 2022) have reached their highest value on record for any year (Jan-Dec periods), at $11.1 billion. This increase is due to a 28% YoY increase in exported volume, at 1,839 thousand mt (also a record high for a Jan-Nov period), and to a 19% YoY increase in the average price, at $6.00/kg (a record high, as well).

Export volume in 2022 has grown on the back of strong Chinese demand throughout the year. Chinese demand strengthened in recent months just before the autumn holidays and also due to shipments meant for the Chinese New Year celebrations in January 2023. Strong US demand earlier in the year also boosted Brazil’s export volumes. The US became increasingly dependent on Brazilian beef, due to supply shortages in Australia. Australia is rebuilding its herd, and fewer cattle were being slaughtered early in the year.

Export prices have been consistently above 2021 levels on renewed demand following the lifting of pandemic restrictions and on much higher input prices. Nonetheless, the current beef price trend points downward. In fact, retail beef prices in Brazil are already trading below levels in the same period in 2021.

For 2023, export volume and value from Brazil could subside from 2022’s records as China, according to the USDA. China is expected to substantially lower its beef imports next year, due to an increase in its own supply and a decrease in its domestic consumption.