Meat Pricing Dynamics in Brazil in 2024: Chicken Gains Competitiveness to Beef and Loses to Pork

In Brazil, consumers typically consider health, taste, and affordability when choosing meat proteins. Therefore, the recent bullish trend witnessed in the country’s beef market since Jul-24 has raised concerns among consumers. This trend is expected to impact beef demand negatively, as many consumers will likely opt for more affordable options such as chicken and pork.

According to data from the National Supply Company (Conab), beef hind with bone in Brazil averaged USD 4.41 per kilogram (kg) in Sep-24, representing a 7.83% increase from USD 4.09/kg in Aug-24 and marking the second consecutive month of price hikes. On the contrary, H1-2024 saw a general downward trend, with prices dropping 13.9% from USD 4.39/kg in Jan-24 to USD 3.78/kg in Jun-24, aside from a slight rise in Apr-24. This price decline was primarily due to an increased beef supply resulting from higher production levels in 2023 and 2024.

Figure 1: Meat Price Trend in Brazil in 2024

However, the recent rise in beef prices since Jul-24 is attributed to a limited supply of cows available for slaughter. According to the Agriculture and Horticulture Development Board (AHDB), Brazil's cattle herd has fewer cows, resulting in reduced breeding and a smaller number of cattle ready for slaughter. Given this trend, the United States Department of Agriculture (USDA) projects that Brazil’s beef production could decline by 0.84% year-on-year (YoY) to 11.75 million metric tons (mmt) in 2025. This forecast signals the beginning of a downturn in Brazil’s cattle cycle and may lead to bullish beef prices in the coming months.

On the other hand, Conab data shows that frozen chicken prices in Brazil averaged USD 1.62/kg in Sep-24, a 1.89% increase from USD 1.59/kg in Aug-24. Throughout 2024, chicken prices have remained relatively stable with minimal fluctuations and consistently lower than beef and pork prices, enhancing its appeal to cost-conscious consumers. Additionally, chicken is often seen as a healthier protein option than beef and pork, making it especially attractive to health-conscious buyers.

Despite the slight rise in chicken prices in Sep-24, its competitiveness relative to beef actually increased, as the price gap widened by 11.33% in Sep-24 compared to Aug-24. A similar trend is unfolding in Oct-24, with data from the Center for Advanced Studies on Applied Economics (Cepea) showing that beef carcass prices were USD 2.30/kg higher than whole chilled chicken as of October 23, 2024. This marks a substantial 20.3% increase in the price difference compared to Sep-24.

However, chicken’s price competitiveness relative to pork has been diminishing. According to Conab, frozen pork leg with bone in Brazil averaged USD 3.06/kg in Sep-24, a modest 0.66% rise from USD 3.04/kg in Aug-24. Since May-24, pork prices have generally trended downward, with a substantial 16.16% decrease as of Sep-24. This drop is likely due to an ample pork supply, as the USDA projects Brazil's pork production will reach 4.5 mmt in 2024, a 1.01% YoY increase. Consequently, the price gap between pork and chicken narrowed by 0.98% in Sep-24 compared to Aug-24. Cepea also reported that chilled whole chicken was priced USD 1.02/kg lower than special pork carcass as of October 23, 2024, a 3.6% reduction from the previous month’s price gap, signaling that chicken’s competitiveness against pork is weakening.

Considering the current pricing trends in Brazil's meat market and the approaching Christmas season, it is essential for stakeholders to implement strategic measures to avoid losses. First, chicken producers and distributors should enhance visibility and ensure strong stock availability in physical stores and online platforms to meet the anticipated high demand driven by its competitive pricing. For pork, given its downward price trend, stakeholders should position it as a high-quality yet affordable choice for festive meals, promoting premium cuts that cater to consumers looking to celebrate without overspending. As for beef, producers and distributors should prioritize stocking affordable cuts such as ground beef and brisket, which offer good value while maintaining quality. Additionally, it is crucial to tailor inventory to high-demand cuts specifically for the Christmas season, ensuring sufficient supply while mitigating cost risks in the current inflationary environment.