Record Brazilian Beef Exports in 2022, Although Prices Close the Year in a Downward Trend
•The average price in 2022 was also the highest on record, but December’s prices were the lowest in 12 months and grew at the slowest YoY pace since February 2021.
•Export value in 2023 is expected to decline due to lower prices.
Brazilian exports of fresh/chilled and frozen beef during 2022 were a record high in both volume and value. According to data from Brazil’s Ministry of Economy, exports in terms of value totaled USD 11.8 billion, up 48% year-over-year (YoY). This increase is due to a 28% YoY increase in exported volume, at 1,991 thousand mt, and to a 17% YoY increase in the average price, at USD 5.91/kg, which also was the highest average price in a year ever recorded.
Export volume in 2022 has grown on the back of strong Chinese demand throughout the year. In fact, according to data from the Brazilian Meatpackers Association (ABRAFRIGO), exports of beef and its derived products to China comprised 53% of Brazil’s total in volume and 61% in value during January-November 2022. As we reported earlier, Chinese demand strengthened in late 2022 just before the autumn holidays, and also due to shipments meant for the Chinese New Year celebrations in January 2023. Meanwhile, 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 from Australia. According to ABRAFRIGO data, exports to the US grew 47% YoY in volume and 13% YoY in volume during January-November 2022 to reach a share of 8% in volume and 7% in value in Brazil’s total beef and derived products exports.
Source: Tridge and Brazilian Ministry of Economy
In December 2022, exports continued with a wide gap against the same period in 2021. In December 2022, according to the Brazilian Ministry of Economy’s data, Brazilian exports of fresh/chilled and frozen beef totaled 153 thousand mt with a value of USD 756 million, up 3% month-over-month (MoM) in volume but down 3% MoM in value. Exports in both value and volume terms continued to be higher compared to those in the same month in 2021, 24% higher in terms of value and 20% in terms of volume.
The average export price in December was USD 4.95/kg, the lowest level since December 2021. This represents a decline of 5% MoM and a small 3% YoY increase. Prices have posted YoY growth each month continuously since February 2021, and this accelerated toward the second half of 2021 and the first half of 2022 on the back of renewed demand following the lifting of pandemic restrictions and much higher input prices. However, December 2022's YoY growth pace was the slowest since February 2021.
It’s clear that the current beef price trend points downward. Prices are now down 27% from their record high of USD 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.
This year, exports could subside at least in value due to lower prices, but there is also pressure for volume due to expectations of lower demand from 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. Meanwhile, ABRAFRIGO mentioned this January that it expects lower exports in 2023 due to a decline in prices.